On This Day 40 Years Ago: Steve Jobs’ Pixar Purchase Ignites a $7.4 Billion Disney Legacy

Steve Jobs purchased the computer graphics division from Lucasfilm on February 3, 1986, for $5 million in technology rights and an additional $5 million in startup capital, laying the groundwork for Pixar Animation Studios and its eventual $7.4 billion sale to Disney that reshaped entertainment. This move not only revived Jobs’ career after his Apple exit but also forged deep ties between him, Disney CEO Bob Iger, and the broader media landscape. As rumors swirl about Apple potentially acquiring Disney, the anniversary highlights how one tech bet influenced Hollywood’s giants.

Here’s the TL;DR…

• Steve Jobs acquired Lucasfilm’s graphics unit in 1986 post-Apple ouster, renaming it Pixar and steering it toward animation innovation.

• Pixar leaders like Ed Catmull and John Lasseter drove CGI breakthroughs, culminating in 1995’s Toy Story and a string of box-office hits.

• Disney bought Pixar in 2006 under Bob Iger’s leadership, making Jobs the company’s largest shareholder and deepening Apple-Disney connections.

• Ongoing speculation about Apple buying Disney echoes Jobs’ legacy, though experts see regulatory hurdles and strategic mismatches.

What Led to Steve Jobs Buying Pixar from George Lucas?

George Lucas needed cash amid a costly divorce and Lucasfilm’s expenses, so he offloaded the unprofitable graphics division he founded in 1979 for film effects like those in Star Wars. Jobs, ousted from Apple in 1985, spotted opportunity in the team’s 3D rendering tech. He finalized the deal on February 3, 1986, paying Lucas $5 million for rights and investing another $5 million to sustain operations, becoming majority owner with 70% stake while employees held 30%.

Pixar faced lean years selling specialized computers to sectors like medicine, but animation experiments kept the spark alive. Jobs poured in over $50 million total by 1991, when he bought out employees to gain full control amid persistent losses. That persistence paid off as Pixar’s tech evolved from hardware to storytelling tools.

How Did Pixar Pioneer Computer Animation in Its Formative Years?

Pixar’s early shorts, like the 1986 Oscar-nominated Luxo Jr. featuring an animated desk lamp that became its logo, demonstrated RenderMan software’s potential. Disney noticed, signing a 1989 deal for animated ads that expanded to features. The 1995 release of Toy Story, the first fully CGI film directed by John Lasseter, earned $373 million globally and proved animation could deliver emotional depth alongside visuals.

Follow-ups like A Bug’s Life in 1998 and Monsters, Inc. in 2001 solidified Pixar’s blend of heart and tech. These successes turned the studio profitable, setting the stage for bigger partnerships.

What Strains Emerged in Pixar’s Partnership with Disney Before the Acquisition?

Initial co-production deals with Disney under Michael Eisner soured over creative control and profit splits, nearly ending the alliance by 2004. Jobs clashed publicly with Eisner, threatening to seek other distributors. Bob Iger’s 2005 ascent to Disney CEO changed the dynamic; he prioritized mending ties with Pixar to revive Disney’s faltering animation arm.

Iger pitched acquisition directly to Jobs, who owned 49.65% of Pixar, during a whiteboard session at Apple headquarters listing pros and cons. The move aimed to infuse Disney with Pixar’s talent and culture.

How Did the 2006 Disney-Pixar Deal Unfold and What Role Did Bob Iger Play?

Disney announced the all-stock acquisition on January 24, 2006, valuing Pixar at $7.4 billion, with completion on May 5 after shareholder approval. Pixar shareholders got 2.3 Disney shares per Pixar share, netting the deal at $6.3 billion after Pixar’s cash reserves. Iger, fresh in his role, saw buying Pixar as the quickest path to revitalizing Disney Animation, calling it his “proudest decision.”

Jobs joined Disney’s board as a non-independent director and became its largest individual shareholder with a 7% stake worth $3.9 billion, surpassing even Roy E. Disney. Ed Catmull became president of the combined animation studios, and Lasseter took chief creative officer duties, reporting to Iger.

What Cemented Steve Jobs’ Ties to Disney and Bob Iger Through Pixar?

The deal fostered a close friendship between Jobs and Iger, with Jobs mentoring Iger on tech and innovation. Iger later sat on Apple’s board until 2019, and in his memoir, he mused that had Jobs lived beyond 2011, the companies might have merged. Their bond extended to business, like Disney’s early adoption of Apple TV and iTunes for content distribution.

This integration brought Pixar’s characters into Disney parks and merchandise, boosting revenue. Jobs’ influence helped Disney navigate digital shifts, echoing his Pixar turnaround.

How Has Pixar’s Legacy Influenced Modern Entertainment and Gaming?

Pixar’s CGI advancements set standards for films, inspiring studios like DreamWorks and Illumination. Its storytelling formula—relatable characters in imaginative worlds—translates to video games, with titles like Kingdom Hearts blending Disney-Pixar IP.

The studio’s tech also impacts visual effects in live-action blockbusters. On its 40th anniversary, fans celebrate milestones like Toy Story’s 30th via archived Jobs interviews reflecting on early risks.

What Fuels Ongoing Rumors of Apple Acquiring Disney?

Speculation about Apple buying Disney dates to the 2000s, fueled by Jobs’ shareholder status and board seat. Rumors resurfaced in 2023 amid Disney’s stock dips and Iger’s return as CEO, with analysts like Needham’s Laura Martin suggesting it could bolster Apple’s streaming ambitions. Iger has dismissed sales, but ties persist through shared services like Apple TV+ hosting Disney content.

Regulatory scrutiny from antitrust bodies would likely block such a mega-deal, given Apple’s $3 trillion valuation and Disney’s $150 billion market cap. Still, the idea lingers as a nod to Jobs’ intertwined legacies.

Forty years after Jobs’ Pixar gamble, the studio stands as a cornerstone of Disney’s empire, generating billions through films, merch, and parks. The acquisition not only salvaged Disney Animation but positioned it for streaming wars, with Jobs’ vision enduring in every Pixar tale. As tech and media converge further, this chapter reminds us how bold bets can redefine industries—though any Apple-Disney union remains more fairy tale than fact.

Hat Tips

• Facebook, “On this day in 1986, Steve Jobs spun Pixar out of Lucasfilm’s…”, February 3, 1986

• Wikipedia, “Pixar”, accessed February 3, 2026

• Slidebean, “The Steve Jobs Pixar Story: How He Almost Went Bankrupt”, November 27, 2021

• IEEE Spectrum, “The Real Story of Pixar”, August 3, 2021

• CNBC, “How Bob Iger convinced Steve Jobs to sell Pixar to Disney: ‘I’ve got a crazy idea’”, December 2, 2020

• M&A Community, “Disney & Pixar Merger: The Inside Story of a $7.4 Billion Deal”, April 3, 2025

• The Walt Disney Company, “Disney To Acquire Pixar”, January 24, 2006

• Vanity Fair, ““We Could Say Anything to Each Other”: Bob Iger Remembers Steve Jobs”, September 18, 2019

• Reddit, “Bob Iger says the acquisition of Pixar is his “proudest decision”…”, accessed February 3, 2026

• X (formerly Twitter), “@oldtoons_ post on Pixar 40th anniversary”, February 3, 2026

• Cartoon Brew, “A rare 1996 interview with Steve Jobs…”, November 19, 2025

• CNBC, “Apple buying Disney would be a storybook ending for Iger, but fairy tales aren’t real”, September 6, 2023

• Wikipedia, “Potential acquisition of Disney by Apple”, accessed February 3, 2026

• Daring Fireball, “Disney and Apple, Sitting in a Tree”, August 16, 2023

Article compiled by Newsroom Staff on February 03, 2026 and was fact-checked by Editorial before publication.