Abrupt move underscores shift toward coding tools, enterprise focus ahead of potential IPO
OpenAI has scrapped its AI video tool Sora, abruptly ending a planned $1 billion deal with Walt Disney Co, in a move that highlights the company’s shift toward more lucrative business areas.
On Monday evening, teams from Walt Disney Co and OpenAI were working together on a project linked to Sora. Just 30 minutes after that meeting, the Disney team was blindsided by news that OpenAI was dropping the tool altogether, a person familiar with the matter said.
OpenAI announced the move publicly on Tuesday.
“It was a big rug-pull,” said the person, who requested anonymity to discuss the matter. The decision marks a significant step by the ChatGPT maker to refocus its business on areas such as coding tools and corporate customers.
Read: Disney’s $1B OpenAI deal collapses as Sora shutdown halts partnership
However, the abrupt cancellation of Sora also illustrates the challenges in streamlining operations as OpenAI prepares for a potential stock market debut that could come as early as later this year.
The move effectively ends a blockbuster $1 billion deal between Disney and OpenAI announced just over three months ago. Under the three-year agreement, Disney had planned to invest $1 billion in OpenAI and provide access to more than 200 of its iconic characters for use in AI-generated videos.
However, the transaction never closed and no money changed hands, according to people familiar with the matter.
OpenAI executives had been debating Sora’s future for some time. Running the AI video tool required significant computational resources, which strained the company’s broader operations.
Even so, some members of the Sora team were surprised by the decision when they were informed on Tuesday morning, sources said. The announcement came just a day after OpenAI published a blog post outlining Sora’s safety standards.
“We’re saying goodbye to Sora … we know this news is disappointing,” the Sora team said in a post on X, adding that timelines for the app and API, as well as details on preserving user work, would be shared later.
Focus shifts to ‘super-app’
OpenAI is now focusing on other research areas, including robotics and artificial general intelligence, while integrating its capabilities into a single “super-app”.
Read More: Microsoft mulls suing Amazon-OpenAI
As part of this shift, Fidji Simo’s title has been changed from CEO of applications to CEO of AGI deployment. Separately, CEO Sam Altman said the company’s security and safety teams would no longer report directly to him.
A Disney spokesperson said the company respects “OpenAI’s decision to exit the video generation business and to shift its priorities elsewhere.”
The two sides are now exploring alternative ways to collaborate or invest, a source said.
OpenAI first introduced Sora in early 2024, drawing widespread attention for its ability to generate high-quality, film-like videos from text prompts. The launch prompted AI companies in the United States and China to accelerate development of competing video-generation models.
