OpenAI’s decision to shut down its AI video generator Sora caught Disney by surprise, as it was about to invest $1 billion in the project. Video generation turned out to be too unprofitable for the company.
OpenAI’s decision to shut down its AI video generator Sora caught Disney by surprise, as it was about to invest $1 billion in the project. Video generation turned out to be too unprofitable for the company.
Disney CEO Bob Iger previously said his company should invest $1 billion in OpenAI and allow Marvel, Pixar, and other characters to appear in Sora videos. Disney has also given the new technology its backing amid skepticism about artificial intelligence.
The WSJ reports that Disney executives learned of Sora’s closure less than an hour before it was announced and were shocked by the decision. Little did they know that in the months since its release, Sora had gradually become a burden on OpenAI.
The company decided to shut down Sora to free up more computing resources to work on a new AI model codenamed Spud. Unlike language models that are trained on text, video models have to understand entire moving worlds, which makes them much more expensive to build. After calculating how much that would cost, OpenAI decided to cancel training the new model designed to generate video in ChatGPT.
OpenAI CEO Sam Altman told employees that the Sora team would now focus on long-term projects such as robotics.
An OpenAI spokeswoman said the company ruthlessly prioritizes its computing resources based on where they bring the greatest long-term economic value.
Altman presented the move as a difficult but necessary sacrifice for the company’s greater goals, writing in an internal letter to employees that he was inspired by their willingness to make «difficult compromises» for the good of the company.
Upon release, Sora soared to the top of the App Store charts within a week of launch, despite being accessible only to invited users. The number of users worldwide peaked at around a million shortly after the app’s launch, but never reached that level again.
In the following months, it shrank to less than 500,000, according to Similarweb. According to WSJ sources, Sora was losing about $1 million a day.
However, OpenAI has struggled to find a way to make Sora viable. In December 2025, the company announced a multi-year deal with Disney to license over 200 characters. As part of the deal, Disney agreed to become one of OpenAI’s major customers and invest $1 billion in the startup. Disney has also been in talks with OpenAI about using ChatGPT across the company.
But OpenAI was already looking for ways to move away from Sora. The company fell further behind Anthropic and realized it needed to invest more resources in building productivity tools, so it began looking for areas to prioritize less.
Initially, OpenAI planned to continue selling video generation features through ChatGPT, but then decided to abandon Sora entirely.
Disney’s $1 billion investment in OpenAI never materialized, and the company’s relationship with OpenAI is effectively on hold.
According to insiders, Disney is in active talks with more than a dozen partners about ways to implement other artificial intelligence tools.
