After accidentally landing from the East Australian Current (EAC) into the wreckage of a sunken container ship, crabs keep shushing Dory, Marlin, and Nemo as they swim along. Dory finally sees the squid's eye and its fearsome beak inside the shadows of a sunken shipping crate. As soon as the squid wakes up, it chases Dory, Marlin, and Nemo around the wreckage. It grabs and nearly eats Nemo, but he, Marlin and Dory escape from being eaten by the giant sea predator when it becomes stuck in a sunken shipping crate during its pursuit of the trio; thus the squid is crushed when the crate falls on top of it.
The giant squid is later seen in the end credits, though only its eye is shown from inside the crate. However, this may only be for the credits, and thus the squid's true status is unknown.
The giant squid in Finding Dory is bioluminescent. In truth, it is unknown if giant squid are even able to create bioluminescence as they do not have photophores. They do however have the ability to change color using chromatophores, as all squid and octopuses do.
The giant squid in Finding Dory is also a mixture of blacks and blues, likely to make it appear more alien and menacing. Giant squid, while able to change color like octopi, are actually brick red (red color helps hide them in dark water as it makes them harder to see) and can turn white. They also shine a bright gold or silver color when light hits them, as evidenced by Tsunemi Kubadera when he filmed one in 2013.
Giant Squid are the inspiration behind the legend of the Kraken, as well as greek monsters such as Scylla.
Giant squid are armed with chitinous teeth that line their suckers in addition to having a beak.
Real giant squid are extremely deep-dwelling animals. They usually inhabit depths of around 3,000-6,000 feet deep, where little to no light comes from the surface.
In reality, giant squid prey on deep-sea fish and other types of squid, not reef fish like in the film.
While fearsome predators, giant squid themselves are prey for sperm whales, which is one reason why they have large eyes.
Out of all the giant squid ever seen and found, only four or five have ever been seen alive; the first footage of a live adult in the wild was taken in 2003. The most famous filmed were filmed alive in 2013 for Discovery Channel and NHK, off of the Ogasawara Islands by both Tsunemi Kubadera and Edith Widder and another in a harbor in Toyama Bay, Japan on December 24, 2015, which was filmed before being guided back out into the open ocean.
If you look closely in the second shot after the squid is crushed, its tentacle (which is potruding from under the fallen crate) is moving, clearly showing that it is indeed still alive.