OpenAI has shut down its AI video tool Sora, marking a major product retreat.
The move has derailed the $1 billion partnership with Disney tied to the technology.
The decision signals a broader strategic reset as OpenAI reassesses challenges in scaling AI video.
OpenAI's AI video generation app, Sora, has shut down, barely months after it first went live. The closure caught many off guard, given the buzz that surrounded the product at launch, and has already triggered a high-profile fallout.
After the shutdown, Disney also left the deal it had signed with OpenAI last year. Under that agreement, Disney had pledged to invest $1 billion in the company and licensed some of its iconic characters for use in Sora. This exit was first reported by The Hollywood Reporter.
2 March 2026
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"We're saying goodbye to Sora. To everyone who created with Sora, shared it, and built community around it: thank you," OpenAI said in a statement. "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," it added.
A spokesperson for The Walt Disney Company siad that it respects OpenAI's decision. "We respect OpenAI's decision to exit the video generation business and to shift its priorities elsewhere," the spokesperson told BBC. "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," the spokesperson added.
The deal had given Sora users the ability to generate AI-made videos featuring Disney characters like Mickey Mouse and Yoda.
At the time, the partnership was seen as a landmark moment for both Silicon Valley and Hollywood. It came after several major film and TV studios had taken AI companies to court over the unauthorised use of their intellectual property, making Disney's willingness to collaborate with OpenAI all the more significant.
Not everyone was pleased, though. Many in the entertainment industry worried that the deal was a step toward AI gradually replacing human talent in the creative process.
Meanwhile, Sora was also losing ground to a rapidly growing list of rivals in the AI video space. One of the most talked-about competitors was China's Seedance, which made headlines in February after videos it generated, featuring realistic depictions of Hollywood characters, went viral online and sparked a fresh wave of controversy around AI and intellectual property.
What This Means for OpenAI
OpenAI appears to be shifting its priorities rather than retreating from the AI video making space entirely. Sora, the standalone app, looks to be a casualty of those evolving ambitions, multiple reports said.
Still, the closure is a telling moment. Sora launched with considerable fanfare as a tool capable of generating realistic videos from simple text prompts.
Its swift shutdown reportedly suggests it never found the foothold its creators had hoped for and may ultimately be remembered as an early experiment rather than the transformative product it was once billed as.
With Sora gone, the AI video generation landscape has shifted in Google's favour, as per The Hollywood Reporter. The search giant now stands as effectively the only major player in the space with meaningful scale. Notably, however, Google has yet to sign any licensing deals with intellectual property holders.
