OpenAI Sora video app gone, $1 billion Disney deal axed: What’s next for AI videos?

Additionally, with OpenAI now set to become the chosen partner for the US Department of Defense, the company might have far more serious things on its plate to consider. 

“We’re saying goodbye to Sora,” the company posted on X. “To everyone who created with Sora, shared it, and built community around it: thank you. 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.”

The rapid rise of Sora AI videos

Sora originally captured global attention when OpenAI teased the underlying model in 2024. The company launched a second-generation version with audio capabilities and improved physics in September 2025, alongside a dedicated consumer app, which was simply called Sora. The app quickly topped the iOS App Store’s ‘Photo & Video’ category within a day of release, as users generated strikingly realistic short videos featuring characters like Mario, Pikachu, and Lara Croft.

However, the tool also ignited immediate controversy over potential copyright violations, deepfake risks, and its possible impact on human creators in Hollywood and beyond. The aim was to create hype around AI-generated content, similar to Google’s Gemini-generated custom art and content using smarter prompts.

AI race makes OpenAI change its strategy

While OpenAI was focused on going commercial with the Sora app, along with plans for an Amazon-style shopping interface (which is also seeing a pull-down) and ads in the ChatGPT interface, its competition leaped ahead in the AI race by focusing more on B2B applications. Anthropic’s Claude models have prioritised text and code generation over resource-heavy media tools, thereby earning preference from the developer community. Even Google has stressed on the actual coding capabilities of Gemini 3. OpenAI had to respond.

Hence, by reallocating scarce GPU resources away from video generation, OpenAI aims to sharpen its focus on more profitable areas such as reasoning, coding, and advanced text models, especially ahead of a rumoured initial public offering later this year. The company had recently raised $110 billion in funding, elevating its valuation to roughly $730 billion.

What happens to the Disney content partnership?

The decision also ends a high-profile partnership with Walt Disney Co. In December 2025, Disney announced a three-year deal to integrate its characters into Sora and committed a $1 billion investment. Following the latest announcement, Disney confirmed the agreement will not move forward.

“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,” they added.

OpenAI has not yet released a specific shutdown timeline, and there will be official instructions for users to export their generated content. The company noted that its Sora research team will continue working on “world simulation” technologies to support advancements in robotics and real-world physical understanding.

Will AI-generated entertainment no longer be a priority?

With the abrupt closure of Sora, it certainly seems so. The recent trends in the AI race now show that AI firms want to utilise the compute-intensive nature of frontier AI development for their short-term goals in the AI race. With all the focus now on furthering the capabilities of their AI models to contest on the global level, it seems that AI firms seem to have let go of the consumer-centric content generation priorities.