Warner Bros. Discovery Shares Dip 1.26% Amid Legal Clash with Midjourney as Stock Ranks 116th in U.S. Trading Volume

Warner Bros. Discovery (WBD.O) closed 9/4 at a -1.26% decline with $0.77B in trading volume, ranking 116th among U.S. stocks. The dip followed a high-profile legal action against AI image generator Midjourney, which the studio alleges has systematically infringed on its intellectual property through unauthorized reproduction of iconic characters like Superman, Wonder Woman, and Bugs Bunny. The lawsuit, filed in California federal court, claims Midjourney trained its AI on WBD’s copyrighted content and now enables users to generate and distribute derivative works without permission.

The complaint highlights specific examples where Midjourney outputs mirror WBD’s copyrighted material with near-identical details, including DC Comics superheroes and Looney Tunes characters. The studio argues this undermines its ability to monetize licensed merchandise and diverts consumers from officially approved products. The legal strategy mirrors prior actions by Disney and NBCUniversal against Midjourney, which collectively seek to establish legal precedent against AI companies leveraging unlicensed content for commercial gain.

Midjourney, a subscription-based platform with 21 million users as of September 2024, has not publicly commented on the lawsuit. The company previously defended its practices in a separate case, asserting that AI training constitutes fair use under copyright law. WBD’s filing, however, emphasizes Midjourney’s awareness of its infringement, citing past measures to block infringing content before reversing them for profit. The outcome could hinge on whether courts recognize AI training as fair use, a question recently tested in cases involving Amazon-backed Anthropic and OpenAI.

The litigation seeks damages and profit disgorgement from Midjourney, though exact figures remain unspecified. WBD’s legal team also demands an injunction to halt further use of its copyrighted works. With AI copyright disputes escalating, the case may set a precedent for how studios protect creative assets in the generative AI era. As of filing, the lawsuit remains in early procedural stages.