In a surprise development, OpenAI has shut down its video-generation app Sora less than two years post-launch, killing its US$1-billion deal with Disney in the process. 

The company shared this news in a brief statement on X yesterday. “We’re saying goodbye to Sora. 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.”

Unveiled in 2024, followed by a second-generation model that was released in September, Sora quickly got the industry’s attention—and sparked concern. With a simple text prompt, users could create high-quality, realistic videos. The slew of content that emerged from users of the tool raised copyright alarms, especially in the kids industry when reports emerged of inappropriate content featuring characters like SpongeBob SquarePants and Pikachu.

To try and take back control over how consumers were using AI to interact with its brands, Disney signed a three-year licensing agreement and made a US$1-billion equity investment in OpenAI, in exchange for the ability to establish firm rules and guardrails governing how users were interacting with its characters. The deal would have allowed Sora users to generate and share short videos using more than 200 characters from Disney, Marvel, Pixar and Star Wars. Disney+ would have added a selection of these videos to its library. But all of that is up in smoke now that Sora is shutting down. 

Parts of the kids industry (and the broader entertainment market) had been up in arms about this partnership, although Disney maintained that it offered a way of participating in a user-generated future that’s inevitable—and in many cases already happening. 

During Sora’s lifetime, the app racked up millions of downloads, but the financial performance of the tech was reportedly unsustainable. Mobile analytics platform Appfigures estimates that Sora, which let users buy video-generation credits, made US$2.1 million from in-app purchases. That might seem like a lot, but it’s a fraction of what’s needed to run video generation at scale, says Sixte de Vauplane, co-founder and CEO of French animation studio Animaj, which has built its own AI tools. And with an IPO potentially on the horizon (perhaps in Q4), it’s possible that OpenAI just didn’t want to be carrying a product that wasn’t driving up its bottom line. 

“Every content producer who built their workflow around Sora just learned the hard way what dependency on a single model looks like,” de Vauplane wrote on LinkedIn today. “If you want AI content that’s fast, cheap, consistent and controllable, you need your own model. Trained on your own data. Running inside your own pipeline.”

Industry eyes are increasingly turning to AI, and especially video-generation tools, with varying degrees of wariness and excitement. For some creatives, Sora and tools like it represent a threat to their livelihoods, while others have embraced it whole-heartedly and are already generating content with it. Still others use it behind the scenes to flesh out concepts and test ideas, preferring to produce the final product by hand.

Toys “R” Us’s creative agency partner Native Foreign and Federation Studios’ Vertigo Films used Sora to make a promo for the retailer a year ago. And they also started using it to produce the animated family feature Critterz. The tool’s shutdown throws into question the project’s future. 

For producers looking for alternatives to Sora, or other AI tools that are on the market, check out Kidscreen’s AI Tool Guide. 

Pictured above is an image Disney released when it shared that users would be able to make AI images and videos of its characters. Image courtesy of Disney.