Last week, OpenAI announced the closure of Sora, its AI video-generation tool, merely six months after its public launch, sparking immediate speculation. The app, which allowed users to upload their own faces, led some to suspect a possible data collection scheme. However, a recent WSJ investigation reveals a less sensational reason: Sora was financially draining and underutilized, hindering OpenAI’s progress in the AI field.
Following an initial surge in popularity, Sora’s global user base reached approximately one million before plummeting to under 500,000. The app was consuming about $1 million daily, not due to high demand, but because of the expensive nature of video generation. Each user who placed themselves in a fantasy setting was depleting a limited supply of AI chips.
While an entire team at OpenAI was dedicated to Sora’s success, Anthropic was quietly gaining favor with software engineers and businesses vital for revenue generation. Particularly, Claude Code was outperforming OpenAI in this regard.
As a result, CEO Sam Altman decided to terminate Sora, reallocating resources and refocusing efforts. The abruptness of this move is underscored by Disney’s experience, as reported by the WSJ: the entertainment titan, having committed $1 billion to the partnership, was informed of Sora’s shutdown less than an hour before the public announcement, effectively ending the deal.
