OpenAI axes Sora video app in pivot to business tools

2026-03-26 - 02:51

• Skips $1bn deal with Disney; refocuses on corporate customers, more lucrative AI • Decision comes amid intensifying competition from rivals SAN FRANCISCO: OpenAI announced on Tuesday it is shutting down Sora, its high-profile artificial intelligence video generator, barely six months after its launch as the company pivots toward business tools ahead of a potential stock market debut. The move abruptly ends a blockbuster, though not yet finalised, $1 billion deal with Walt Disney Co and marks the end of one of the most visible consumer AI product launches of the past year. “We’re saying goodbye to Sora,” the company said in a post on X. OpenAI said it would later provide timelines for winding down the app and details on how users can preserve their work. The decision blindsided Disney, a key partner. A team from the media giant had just concluded a meeting with OpenAI about a project linked to Sora when, 30 minutes later, they were told the tool was being dropped, according to a person familiar with the matter. “It was a big rug-pull,” said the person, who requested anonymity to discuss the situation. The shutdown is a significant step by the ChatGPT maker to focus its business on potentially more lucrative areas like corporate customers and advanced coding tools. However, the abrupt cancellation illustrates potential turmoil as the company streamlines its operations in preparation for an IPO that could come as early as later this year. The now-defunct three-year deal, announced just over three months ago, would have involved a $1 billion investment from Disney into OpenAI and the licensing of popular characters for use in AI-generated videos. The transaction between the companies never closed and no money was exchanged, according to two other people familiar with the matter. “We respect OpenAI’s decision to exit the video generation business and to shift its priorities elsewhere,” a Disney spokesperson told The Reporter. “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.” The decision comes at a sensitive time for OpenAI, which faces growing questions about the sustainability of its business model as costs reportedly skyrocket faster than revenue. According to The Wall Street Journal, OpenAI CEO Sam Altman announced the changes to staff on Tuesday. Published in Dawn, March 26th, 2026