OpenAI just shut down Sora, and It took Disney's deal With It

Is the AI bubble popping? Well, it might not be anytime soon, but it looks like we are definitely moving one step forward to popping the AI slop machine instead. As OpenAI unexpectedly decided to shut down the viral Sora, an AI video-generating model, which they had launched for public use back in late 2024, and then relaunched as a standalone app in September 2025. This new development now has some implications. Let's dive in.

OpenAI Shuts Down Sora

What happened?

This announcement came through Sora's official X account just yesterday, and it was brief to the point of being jarring. "We're saying goodbye to Sora," the post read, thanking users for their content. No detailed explanation was given, and no timeline for the actual shutdown was included, though OpenAI said it would share more information soon, including details on how users can export and preserve their videos.

We’re saying goodbye to the Sora app. 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…

— Sora (@soraofficialapp)

 A more strange thing about this immediate shutdown is that just one day before the announcement, OpenAI had published a blog post titled "Creating with Sora safely," where they had outlined new guardrails around content, stricter protections for teens, and restrictions on harmful material. And killing their product the very next day was the last thing their users would expect. 

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Disney's deal is also over

Back in December 2025, Disney signed a three-year deal with OpenAI, where it was agreed that Sora users could get access to over 200 licensed characters from Marvel, Pixar, and Star Wars. Disney also had a $1 billion investment in OpenAI linked to the agreement. All of that is now off the table. Disney confirmed it was ending both the licensing agreement and the planned investment. 

Why did this happen?

OpenAI hasn't given a clear official reason, but the reasons seem fairly simple to me. Sora was very resource-intensive and required significant computing resources to run. And since OpenAI is also preparing for an IPO in the coming months, reallocating those compute resources toward more commercially productive areas like coding, reasoning, and text generation might make good business sense, especially when you're trying to demonstrate profitability to investors.

Similarly, the copyright concerns have also shadowed Sora since its earliest demos. The platform had already raised alarms around deepfakes, nonconsensual content, and the use of copyrighted characters without permission, and OpenAI had already been forced to restrict AI recreations of public figures, including Michael Jackson and Martin Luther King Jr., after pressure from estate lawyers and creative unions.

But besides, there's also the competitive pressure from Anthropic. Claude has been gaining ground rapidly among businesses and developers. Just recently, they updated their Cowork model with a dispatch feature, which we have covered elsewhere, and Anthropic’s explicit focus on text and code rather than image or video generation has also made it look more serious in the AI venture. There is a good chance OpenAI is also now looking forward to recalibrating in a similar direction.

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