OpenAI kills Sora, Disney walks away from $1B

OpenAI just pulled the plug on Sora, its buzzy AI video app, after just six months on the market.

Along with the app’s shutdown, Disney is walking away from the blockbuster $1 billion deal it struck with OpenAI last December. That partnership was supposed to bring iconic characters from Marvel, Pixar, and Star Wars into Sora, with long-term plans to feed user-generated AI clips straight into Disney+. According to reports, no money had actually changed hands yet.

Viral creepiness and compute hangovers

When Sora rolled out its invite-only feed last fall, everyone wanted in. It tried to clone TikTok’s vertical scroll, anchored by a signature feature that let users scan their faces to generate hyper-realistic deepfakes.

Things went off the rails almost immediately. The feed turned into an unhinged playground of fake Sam Altman clips, deceased celebrities like Martin Luther King Jr. and Robin Williams without family consent, and copyright chaos featuring Mario and Naruto.

Beyond the brand headache, the numbers simply did not hold up. Mobile analytics firm Appfigures reported Sora peaked at 3.3 million downloads in November before sinking to 1.1 million by February, generating a measly $2.1 million in lifetime in-app purchases. When running an inference-heavy video model is starving your other teams of compute, that kind of engagement just does not justify the electric bill.

Clearing the deck for the desktop superapp

OpenAI is aggressively trimming its side quests. After declaring a internal "code red" over pressure from Google Gemini, Sam Altman is refocusing the ship on what actually drives revenue: work and coding.

Reports indicate OpenAI is actively working on a unified ChatGPT desktop "superapp" that pulls in Codex and its upcoming AI browser. Exec Fidji Simo noted that while exploration matters, doubling down on working bets like Codex is critical to avoid distraction. Meanwhile, CFO Sarah Friar confirmed another fresh $10 billion raised from investors on top of February's massive round, pointing the company straight toward an IPO.

While OpenAI's public statement noted that AI video will live on inside ChatGPT, internal reports suggest developer API access is being wound down alongside the standalone app.

Why it matters

If you built workflows or creative experiments around Sora, you need to prepare your exit strategy and grab your archive files before the doors lock.

This retreat leaves Google as the primary powerhouse with the infrastructure to run generative video at massive scale. But Google has its own hurdles: it has zero major studio licensing deals in hand and faces an uphill battle with copyright holders.

We think this decision shows OpenAI finally admitting what it is not. Building consumer social feeds requires ruthless community moderation, cultural curation, and cheap distribution. An AI lab burning scarce GPU cycles on low-retention meme videos while losing a billion-dollar Disney pipeline is a luxury OpenAI simply couldn't afford on the road to an IPO.