Reports suggest Disney’s $1bn equity investment into OpenAI will not progress.
OpenAI is shutting down its controversial AI video generator Sora just months after announcing a multi-year licensing deal with Disney. The company told the BBC that the discontinuation will enable it to focus on other developments, such as robotics “that will help people solve real-world, physical tasks”.
Details on the timeline of the app’s shutdown, API and data preservation will be shared soon, OpenAI’s Sora team said in a post 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,” the post read.
The BBC further reported that following Sora’s closure, OpenAI will no longer focus on video-generation tools.
Video models such as Sora, its later iteration Sora 2 – which came with a social media app to share the AI content – as well as more recent ones such as ByteDance’s Seedance 2.0 have garnered strong criticism from artists and publishers who oppose to their copyrighted material being used to generate AI videos.
Prior to Sora’s launch in late 2024, protesting artists reportedly leaked the model on Hugging Face, claiming they were “lured” by OpenAI into “’art washing’ to tell the world that Sora is a useful tool for artists”.
Meanwhile, Disney’s three-year partnership and licensing deal with OpenAI came after the company reportedly opted out of allowing its copyrighted material from being used by Sora.
The deal, announced in December 2025, gave OpenAI access to more than 200 Disney characters to be used by Sora and ChatGPT Images. Alongside the licensing agreement, Disney also agreed to make a $1bn equity investment in OpenAI. The investment has reportedly been scrapped.
“We respect OpenAI’s decision to exit the video generation business and to shift its priorities elsewhere,” a Disney spokesperson told news outlets.
“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.”
With Sora’s closure, OpenAI is seemingly shifting priorities towards AI tools suited for enterprise use, a sector where Anthropic is capturing a majority of newcomers. Meanwhile, Claude also overtook ChatGPT as the most downloaded app in the US last month.
To compete, OpenAI is building a new desktop ‘superapp’ by fusing together ChatGPT, Codex – the company’s coding tool – and Atlas, an AI-powered web browser launched last October.
“Sora was a resource black hole with strong compute costs and limited monetisation. The platform also struggled to prevent the creation of non-consensual imagery and realistic misinformation, not to mention major copyright infringement,” commented Forrester’s VP principal analyst Thomas Husson.
“In the context of its upcoming IPO, OpenAI likely decided to minimise the associated risks and prioritise profits and enterprise tools over experimental social apps, despite some consumer interest.
“Sora may be repurposed for some robotics and physical applications, but it is still very early days. At the end of the day, it highlights that OpenAI is still very far away from recouping its huge investments.”
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