The lawsuit alleges that Midjourney's AI image- and video-generation technologies "blatantly incorporate and copy Disney's and Universal's famous characters," like Yoda, Shrek and Marvel superheroes.

Disney and Universal sued popular artificial intelligence image-generator Midjourney on Wednesday, marking the first time major Hollywood companies have taken legal action against a maker of generative AI technology that could upend the entertainment industry.

Disney and Universal just sued Midjourney for scraping their IP—ushering in a major showdown over how AI is trained.