OpenAI has closed Sora, the short-form video app that went viral after its launch six months ago, announcing the shutdown on Tuesday without explanation. The decision marks a stunning reversal for a product that seemed positioned to transform entertainment technology when it debuted.
While Sora proved wildly popular with users, hitting one million downloads less than five days after its launch in late September, the app rocketed to the top of Apple's App Store, though the initial excitement among users has since dissipated. According to analytics data cited in initial reporting, the app was seeing successive month-over-month declines in both new installs and user spending, with a 32 percent decline in new downloads from November alone in December.
More significant than the app's struggling user metrics is the collapse of OpenAI's partnership with Disney. Disney is exiting the deal it signed with OpenAI last year, in which it pledged to invest $1 billion in the company and agreed to license some of its characters for use in Sora. In December, Disney announced it would invest $1 billion in OpenAI and allow users to make videos with its copyrighted characters on Sora, however, the transaction never closed.
The shutdown reflects a significant strategic recalibration. OpenAI has been retreating from some of its costly projects as it tries to reel in costs ahead of a prospective IPO. The company also announced plans to combine its web browser, ChatGPT app and Codex coding app into a singular desktop super app earlier this month. Rather than abandoning video technology entirely, OpenAI is not exiting AI video entirely; instead, it seems to be folding those capabilities into broader products like ChatGPT.
The Disney deal represented a bet-the-farm moment for OpenAI's consumer video ambitions. Sora would have been able to generate short, user-prompted social videos that could be viewed and shared by fans, drawing from a set of more than 200 animated, masked, and creature characters from Disney, Marvel, Pixar, and Star Wars, including costumes, props, vehicles, and iconic environments. The agreement was meant to deliver legitimacy for generative video in an industry deeply sceptical of the technology.
Yet OpenAI has recently come under intense pressure from rival AI company Anthropic, whose AI systems have soared in popularity among leading businesses and software engineers. Anthropic, with its flagship Claude family of AI models, has eschewed products like image and video generation to instead focus scarce computational resources on text and code generation. This competitive pressure, combined with mounting legal threats and user attrition, likely accelerated the decision to consolidate resources.
Disney responded with a diplomatically measured statement. As the nascent AI field advances rapidly, Disney said it respects OpenAI's decision to exit the video generation business and to shift its priorities elsewhere, adding that it appreciates the constructive collaboration between their teams and what they learned from it. But the reality is harder edged: the company is declining to fund a venture it bankrolled only months earlier.
For OpenAI, the pivot reflects hard business logic. Resources are finite, especially for computationally expensive generative video. The enterprise market for code generation and professional tools offers clearer near-term revenue and a plausible path to profitability before public markets demand answers. Video generation, despite its flashiness, proved difficult to monetise and easier to abandon when user growth stalled and partnerships crumbled.