Disney Exits OpenAI Deal After AI Giant Shutters Sora

In a surprise move, OpenAI will shut down its Sora AI video app, just months after it was first launched.

“We’re saying goodbye to Sora. To everyone who created with Sora, shared it, and built community around it: thank you,” the company said in a statement. “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 preserving your work.”

A source familiar with the matter tells The Hollywood Reporter that Disney is also 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.

OpenAI, led by CEO Sam Altman, is not getting out of the AI video business (AI video is one of many tools that can take form in the ChatGPT app), of course, but it appears the standalone Sora app will be a casualty of its evolving ambitions.

Sora launched last fall, shocking and awing Hollywood with its free use of established intellectual property and known actors. The company had to backtrack a few days after it launched, giving Hollywood studios and talent more control over their IP and likenesses on the platform.

But the closure of the app also raises questions for Disney, which inked a blockbuster deal to invest in OpenAI last December, in exchange for adding some of its characters to Sora. The goal, of course, was to integrate the tech into Disney+ itself.

Now the OpenAI deal is dead, though the company could ink a deal with another AI giant.

“As the nascent AI field advances rapidly, we respect OpenAI’s decision to exit the video generation business and to shift its priorities elsewhere,” a Disney spokesperson said. “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.”

However generative AI changes video development and production, it appears that Sora will end up as a footnote, rather than a game-changing piece of software.

It also puts Google in a position of power when it comes to AI video generation, making it essentially the only player in the space with scale, though it has thus far not inked any deals with IP holders (and in fact has been facing lawsuits from some of them).