Warner Bros Discovery has launched a major lawsuit against Midjourney, accusing the fast-growing AI photo generation company of unlawfully exploiting its vast library of characters to train its systems and produce images for paying users.

The complaint, filed Thursday in Los Angeles federal court, claims Midjourney “brazenly stole” works featuring Superman, Batman, Wonder Woman, Bugs Bunny, Scooby-Doo, and other icons to generate downloadable depictions of them “in every imaginable scene.”

The case, Warner Bros Entertainment Inc et al v Midjourney Inc (No. 25-08376), is the latest in a growing wave of legal battles over how AI firms are sourcing their training data—and who ultimately profits from it.

According to the complaint, Midjourney not only knew its conduct was wrongful but had previously blocked subscribers from generating videos from infringing images. The company later lifted that safeguard last month, promoting it as an “improvement.”

“Midjourney has made a calculated and profit-driven decision to offer zero protection for copyright owners even though Midjourney knows about the breathtaking scope of its piracy and copyright infringement,” Warner Bros alleged.

The studio is seeking unspecified damages, disgorgement of profits, and a halt to further infringements.

A Warner Bros Discovery spokesperson framed the lawsuit as a defense of its creative foundation: “The heart of what we do is develop stories and characters to entertain our audiences, bringing to life the vision and passion of our creative partners. We filed this suit to protect our content, our partners and our investments.”

Warner Bros Discovery’s operations include Warner Bros Entertainment, Turner Entertainment, DC Comics, Hanna-Barbera, and The Cartoon Network.

Hollywood Studios Closing Ranks

This legal action follows a June lawsuit against Midjourney by Walt Disney and Comcast’s Universal, which accused the platform of enabling unauthorized depictions of Darth Vader, Bart Simpson, Shrek, and Ariel from The Little Mermaid.

Taken together, these lawsuits show Hollywood’s largest studios closing ranks against AI firms they see as siphoning off the value of decades-old franchises without permission or compensation.

Midjourney’s Growth and Defense

Founded in 2022 by David Holz, San Francisco-based Midjourney has become one of the most prominent generative AI startups. By September 2024, it had attracted nearly 21 million users and, according to Warner Bros’ complaint, generated around $300 million in annual revenue.

In an August 6 filing in the Disney-Universal case, Midjourney insisted that copyright law “does not confer absolute control” over how works are used. The company argued that training generative AI on copyrighted material qualifies as fair use, a legal doctrine it said ensures “the free flow of ideas and information.”

This defense mirrors the strategy adopted by other AI players under legal fire. OpenAI, Stability AI, and Anthropic are all facing lawsuits from authors, publishers, and record labels alleging that their works were ingested without consent to fuel AI systems. The outcomes of these cases could set precedents that determine how far AI firms can go in using copyrighted content.

The Warner Bros suit also lands just weeks after Meta struck a high-profile partnership with Midjourney, highlighting the company’s growing influence in Silicon Valley. That deal drew attention because it linked one of the world’s biggest social media companies to an AI platform now at the center of copyright battles with Hollywood’s most powerful studios.

With AI partnerships gaining mainstream legitimacy, studios fear their characters could be replicated endlessly in new forms with little regard for ownership rights.

Beyond Batman and Bugs Bunny

The lawsuit underscores the broader anxiety sweeping the creative industries. Characters such as Batman, Superman, and Bugs Bunny are not just beloved cultural figures—they are pillars of billion-dollar franchises that fuel films, merchandise, and television programming worldwide. Allowing unlicensed use, Warner Bros argues, undermines both its financial investments and its creative control.

The Warner Bros complaint now adds to a rising tide of copyright challenges that could reshape the AI industry. If courts reject the fair use claims of AI companies, firms like Midjourney may be forced to radically alter their business models—potentially paying massive licensing fees or rebuilding datasets from scratch.

As it stands, Warner Bros’ case against Midjourney will now proceed in California, where judges will weigh whether training and generating with copyrighted characters constitutes fair use or wholesale infringement.

Warner Bros. Discovery has filed a lawsuit against AI image-generation startup Midjourney, accusing the company of “blatantly and purposefully” infringing on its intellectual property. According to the complaint, Midjourney has generated “countless” images of WB-owned IP like Bugs Bunny, Wonder Woman and “Rick and Morty,” sometimes even in response to user prompts that don’t mention the characters by name. Midjourney now finds itself in the legal crosshairs of three media giants, after Disney and Universal sued the company for copyright infringement this summer.

Tesla shareholders are preparing for a pivotal vote that could determine how closely Elon Musk’s ventures intertwine. On November 6, investors will decide whether to let the electric vehicle maker invest directly in Musk’s artificial intelligence startup, xAI — a proposal pitched as a way to accelerate Tesla’s transition into an AI, robotics, and energy powerhouse.

The vote comes at a critical juncture for Tesla, which is trying to reassure Wall Street after a stretch of weakening EV sales and a stumbling rollout of its long-promised robotaxi program. Management has increasingly emphasized AI as the company’s true growth engine, with ambitions centered on Full Self-Driving (FSD) technology and Optimus, its humanoid robot.

The xAI proposal, put forward by Florida shareholder Stephen Hawk, who owns $2,000 worth of Tesla stock, was included in Tesla’s latest proxy statement. In his supporting statement, Hawk argued that Tesla’s integration of Grok — xAI’s chatbot into its vehicles demonstrates the clear upside of collaboration.

“As Tesla pivots toward AI-driven technologies, including Full Self-Driving and robotics, a strategic investment in xAI would secure access to advanced AI capabilities, enhance product innovation, and drive shareholder value,” he wrote.

Notably, the Tesla board has taken a neutral stance, a rare departure from its usual practice of advising against shareholder-led proposals. If approved, Tesla would become the second of Musk’s companies to back xAI financially. SpaceX, his aerospace firm, has already pledged $2 billion as part of a broader $5 billion equity raise. That heavy lift by SpaceX has fueled speculation that xAI is struggling to draw outside investors — raising questions about whether Tesla shareholders might end up subsidizing another Musk-led venture.

Musk also folded X, the company formerly known as Twitter, into xAI earlier this year, cementing his bet on the startup as the centerpiece of his AI empire.

Some investors, however, see risks of conflict. Musk has long described Tesla as an AI company in its own right, and a group of shareholders sued him last year for launching a rival AI firm. Though that case was dismissed, it underscored the lingering unease that Musk’s attention could be split. In response, Musk has argued that he needs more direct control of Tesla to fully lead its AI future and avoid distractions posed by xAI.

That argument dovetails with another high-stakes item on the ballot: a Tesla-backed, 10-year compensation plan for Musk that could be worth up to $1 trillion. The package, designed to give Musk more than 25% ownership of the company, would tie his payout to extreme growth targets, including lifting Tesla’s market capitalization from about $1 trillion today to more than $8 trillion.

Tesla is still appealing a Delaware court’s decision earlier this year to strike down Musk’s prior $56 billion pay package, with the judge ruling that it was unfairly structured. The new $1 trillion plan is being positioned not just as a replacement but as a mechanism to lock Musk’s focus squarely on Tesla at a time when he is stretched across multiple ventures.

“The point of this package is to keep Musk engaged,” Gene Munster, managing partner at Deepwater Asset Management, told TechCrunch. He noted that Tesla cannot realistically reach an $8 trillion valuation on FSD and robotaxis alone.

“To get to those numbers, we need things to happen that are inconceivable right now. And one of them is humanoid robots everywhere; that’s probably the biggest lever.”

Munster added that xAI could play a decisive role in helping Tesla get there — not only by providing compute and advanced AI resources, but also by fueling investor excitement around the integration of the two companies.

“Just the excitement around xAI and Tesla together is going to move Tesla’s valuation higher,” he said.

The shareholder meeting is scheduled for November 6 at 3 p.m. Central Time at Tesla’s Gigafactory Texas, with a livestream planned. With Tesla facing pressure from slowing EV demand, rising competition in China, and questions about Musk’s bandwidth, the votes on xAI and Musk’s $1 trillion package will test how much faith investors still have in his vision — and how far they are willing to go to keep him focused on Tesla’s future.