Disney CEO Josh D'Amaro's First Week Marred by Epic Games and OpenAI Troubles

Josh D'Amaro's first week as chief executive officer of Walt Disney Company was disrupted by setbacks in two major technology partnerships, with Epic Games announcing layoffs tied to declining Fortnite engagement and OpenAI shutting down its Sora video generator and ending a planned billion-dollar deal with Disney. D'Amaro took over from Bob Iger on March 18, 2026, and within days saw both bets stumble. Disney shares closed down 1.6 (%) — Disney share decline on Tuesday, March 24 on Tuesday. The twin blows arrived just days after D'Amaro outlined a technology-forward vision for the company at its annual shareholder meeting, where he described Disney's streaming service as a future portal for games and experiences, not just films and television.

Epic lays off 1,000 as Fortnite engagement falls Epic Games announced on Tuesday, March 24, that it was cutting employees after new versions of Fortnite failed to connect with players. Disney had announced a 1.5 (billion USD) — Disney investment in Epic Games investment in Epic two years ago, a deal that D'Amaro himself led when he was running Disney's theme parks, consumer products, and gaming businesses. The partnership envisioned an entirely new digital universe tied to Disney characters and stories, with early illustrations showing an online Fortnite world resembling a theme park. D'Amaro joined Epic's board as an observer as part of that arrangement. In a memo to staff and fans, Epic Games founder Tim Sweeney said the decline in engagement had left the company spending more than it was earning, and that roughly $500 million in cost cuts should position Epic for what he called "huge launch plans towards the end of the year." Sweeney did not address the new Disney product in his memo.

OpenAI shuts Sora, ending Disney's AI content plans Hours after the Epic announcement, OpenAI announced it was shutting down Sora, its AI video generator, and ending a partnership with Disney that would have involved a $1 billion equity investment from the entertainment company. The Sora collaboration was among the first formal arrangements between a legacy Hollywood studio and generative video technology. Disney had announced plans just four months earlier to allow fans to create short social videos based on famous characters — including figures from Star Wars and Marvel — by speaking a few words into an app, with some 200 characters, costumes, and vehicles available. Disney had even planned to feature some fan-created videos on its own streaming service. OpenAI said the Sora shutdown coincides with a broader push to streamline its product lineup. In a statement following the announcement, Disney said the artificial intelligence field is a nascent one where change comes quickly, and that it would "continue to engage with AI platforms to find new ways" forward, according to the Bloomberg report.

D'Amaro's tech vision tested before it could take shape D'Amaro, who has worked at Disney for 27 years and previously served as chairman of Disney Experiences, formally assumed the chief executive role at the company's annual meeting on March 18, 2026, succeeding Bob Iger. At that meeting, he described his goal as delivering "a more connected, personalized, and immersive experience" to consumers wherever and whenever they wished to engage with Disney. The Epic and OpenAI partnerships were central examples of the kind of technology-driven expansion D'Amaro had championed before taking the top job. The Sora deal in particular was framed as a pioneering move for Hollywood, an industry that has viewed generative AI with a mixture of commercial interest and concern over job losses and intellectual property. Both partnerships now leave Disney without two of its most prominent technology commitments at the start of D'Amaro's tenure. Disney's push into gaming and interactive digital worlds accelerated after the company announced the Epic Games investment two years before D'Amaro became CEO. The Sora partnership was described as one of the first of its kind between a major Hollywood studio and an AI video generation platform. D'Amaro spent the bulk of his Disney career in the experiences and parks division before being elevated to the chief executive role in March 2026.