OpenAI announced on March 24 that it is discontinuing Sora, the short-form AI video app that generated significant industry attention when it launched publicly in late 2024. The iOS app, its API, and Sora.com will all be closed, though the company has not yet specified exact shutdown dates. OpenAI offered no detailed explanation in its announcement, posting only a brief farewell message on X.
The closure coincides with the collapse of a planned partnership with Disney. Variety reported that Disney had been considering an investment of up to $1bn in OpenAI, a deal that has now been abandoned following the Sora shutdown.
The Wall Street Journal, citing sources familiar with the matter, described the decision as part of a broader strategic shift toward coding tools and AI agents, product areas OpenAI appears to view as more commercially defensible. The New York Times reported that the company is rethinking spending patterns ahead of what could be a significant IPO.
Sora had been notable at launch for its ability to generate hyper-realistic video from text prompts, causing immediate concern across parts of the media and entertainment industry. The standalone app, introduced roughly six months ago, offered users a social feed for sharing AI-generated video content. Despite the initial splash, the product is being discontinued at a moment when OpenAI is under pressure to demonstrate a clearer path to profitability.
CNBC framed the decision explicitly as a cost-reduction measure. OpenAI, which has never been consistently profitable, raised $40bn in a funding round at a $300bn valuation earlier this year. The combination of heavy infrastructure costs, aggressive hiring, and the capital demands of frontier model development has kept spending under scrutiny from investors and board members alike.
