On Tuesday morning, everything was business as usual at OpenAI. By the end of the day, the company had announced that it would scrap its video-generation app, Sora, and reverse plans for video generation inside ChatGPT; it would wind down a $1 billion Disney deal; it would shuffle the role of a high-level executive; and it would raise an additional $10 billion from investors, adding up to more than $120 billion total for its latest funding round.

Why OpenAI killed Sora

Too much compute, too much competition, and skeptical investors.

OpenAI is now in a frenzy to turn a profit, or at least lose less money. Since its launch, Sora seems to have taken up a massive amount of compute without the financial return to justify it. Industry sources told The Verge that it’s been lagging behind competing video-generation models. But despite its short life, it’s leaving behind a legacy of eroded trust in judging what’s real.

As OpenAI faces questions from investors and hot competition from Anthropic and Google, executives seem to agree that a change in direction is warranted. “We cannot miss this moment because we are distracted by side quests,” Fidji Simo, OpenAI’s CEO of AGI deployment, reportedly told staff recently. “We really have to nail productivity in general and particularly productivity on the business front.” That means backing off projects like Sora, as well as reportedly deprioritizing the “adult mode” capabilities it had been exploring for ChatGPT.

Sora was already struggling to compete in the cutthroat AI video generation industry, according to Trevor Harries-Jones, board member at the Render Network Foundation. “The state of innovation and the plethora of choice means there’s just little to no moat and it’s very simple to switch between,” Harries-Jones told The Verge. He noted that Sora had been eclipsed by competitive players like Google and Kling.

Sora’s user struggles were reflected in download numbers from Sensor Tower. After a strong start with 6.1 million downloads in November, numbers dropped sharply to just 1.1 million by March.

The revenue push is further frustrated with the loss of the Disney deal. The $1 billion agreement, which would have integrated Sora into Disney+ and Marvel content, was canceled just three months into a three-year term.

OpenAI spokesperson Kayla Wood stated that the company decided to discontinue Sora in the consumer app and API to focus compute on AI agent goals and world simulation research for robotics. The Sora research team will now pivot to advancing robotics that help solve real-world physical tasks.