OpenAI closes Sora AI Video Generator and cancels $1bn Disney partnership
OpenAI’s AI video slop generator is dead – Will OpenAI soon follow?
OpenAI has confirmed that it has discontinued its Sora AI video generation tool and has pivoted away from video generation tools entirely. Now, OpenAI appears to be focusing on other forms of AI. Presumably, this will be forms of AI that weren’t burning colossal amounts of money and compute with little to no revenue generation.
With its shift away from video, OpenAI appears to be doubling down on AI coding tools and other business applications. While Sora shocked the world when it launched, the platform didn’t remain popular for long. Simply put, Sora was too computationally intensive to keep running because it wasn’t generating anywhere near enough revenue to be worthwhile. Furthermore, the platform was a nightmare for copyright infringement and the spread of misinformation.
Disney has confirmed that it has pulled out of its $1 billion investment deal with OpenAI. Now that OpenAI isn’t in the video generation business, Disney are no longer interested in the partnership. This denied OpenAI this investment income, though OpenAI likely sees this as a worthwhile sacrifice.
Below is what a Disney representative had to say about the company pulling out of its $1 billion deal with OpenAI;
As the nascent AI field advances rapidly, we respect OpenAI’s decision to exit the video generation business and to shift its priorities elsewhere,
We appreciate the constructive collaboration between our teams and what we learned from it, and we will continue to engage with AI platforms to find new ways to meet fans where they are while responsibly embracing new technologies that respect IP and the rights of creators.
– Disney Rep to The Hollywood Reporter
We’re saying goodbye to the Sora app. To everyone who created with Sora, shared it, and built community around it: thank you. What you made with Sora mattered, and we know this news is disappointing.
We’ll share more soon, including timelines for the app and API and details on…
— Sora (@soraofficialapp) March 24, 2026
Is OpenAI finished?
OpenAI appears to be in a cost-cutting mood. Last month, OpenAI cut its planned infrastructure investments from $1.4 trillion to $600 billion by 2030. Now, OpenAI has moved away from AI-generated video and killed its Sora platform. While OpenAI’s spending plans are now lower, the company has simply replaced an insane number with something that is a little less insane. Either way, it seems unclear how OpenAI will generate enough revenue to cover this level of spending.
Last year, OpenAI generated $13.1 billion in revenue. By 2030, the company plans to generate $280 billion in yearly revenue. Again, it is unclear how OpenAI will achieve this, especially now that it is exiting markets it once marketed as exciting technological innovations. Now that Sora is gone, we can see it for what it is: a short-term hype machine.
While some see OpenAI’s closure of Sora as a strategic refocus, it cannot be denied that the company is burning cash at an alarming rate. Is OpenAI cleaning up its act in the hopes of getting additional investment? Are OpenAI tightening its purse strings ahead of a potential IPO? Or is OpenAI simply cutting expenditure to keep itself solvent for just a little while longer?
One thing’s for certain, Sora wasn’t generating any profit for OpenAI. Sooner or later, we will see whether OpenAI has what it takes to survive in the long term. Is this the beginning of the end of the so-called “AI bubble”?
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