Reasons that prompted OpenAI to shut down Sora

OpenAI on March 24 announced plans to shut down the video creation application Sora, reverse the integration plan in ChatGPT, and stop pursuing a billion USD deal with Disney. The company also changed the position of a senior leader, and added $10 billion from investors to its capital of more than $120 billion in the most recent fundraising round.

This shows that OpenAI is rushing to find ways to make a profit, or at least limit capital losses. Since its launch, Sora has become one of the most resource-hungry AI tasks, but has not yet brought in economic profits to warrant its continued operation. Sources in the AI ​​industry revealed to The Verge that this application is far behind its competitors in creating videos.

As OpenAI faces question marks from investors, as well as fierce competition from Anthropic and Google, the company’s leadership is said to have agreed to change its operating direction.

“This period cannot be missed because of distractions on side projects. We need to increase productivity in general and productivity on the business side,” Fidji Simo, OpenAI’s CEO in charge of artificial general intelligence (AGI) deployment, told employees.

Before it was shut down, Sora was struggling to compete in AI video creation.

“The diversity of applications and new technologies constantly emerging make it very easy for users to switch between platforms, with almost no barriers. If a business’s AI model is not leading in the field, it will be very difficult for them to attract a large number of users,” said Trevor Harries-Jones, a member of the executive board of the Render Network Foundation, an organization that allows content creators to compare AI video creation applications.

Harries-Jones attributed OpenAI’s decision to the “incredible pace of innovation” in AI video creation, as well as fierce competition from rivals like Google and Kling.

“Sora doesn’t hold any clear advantage. They started off strong, but quickly ran out of steam and were overwhelmed by their competitors. Sora’s launch was groundbreaking, but there was a huge gap between demonstration videos and actual operations, not to mention operating costs and video creation time,” he said.

Data from market analysis company Sensor Tower also reflects Sora’s difficulties. “It was one of the fastest growing apps after launch, but quickly declined after just a few months,” said Seema Shah, vice president of analytics at Sensor Tower.

In October 2025, Sora had 4.8 million downloads globally, then increased to 6.1 million in November 2025. The number decreased sharply from December 2025 to March 2026, with monthly downloads of 3.2 million, 2.1 million, 1.4 million and 1.1 million respectively.

“It’s worth noting that the numbers kept falling while they expanded into new markets, which should have driven growth,” she said.

Video creation applications also consume a lot of expensive computational resources, when OpenAI needs them the most.

During the annual DevDay event in October 2025, OpenAI leaders continuously expressed their desire to increase revenue, while also expressing concerns that barriers to computing capacity could limit the expansion of the company’s operating scale.

Efforts to increase revenue became even more difficult when OpenAI abandoned its agreement with Disney.

In the agreement signed late last year, Disney committed to invest one billion USD to become a shareholder of OpenAI with the condition of buying more shares in the future. The group also set conditions to become a “key customer” of OpenAI, deploying the company’s applications to develop new products for Disney+ and ensuring the provision of ChatGPT for all employees.

The deal also allows Disney characters to appear in user-generated AI videos on Sora.

The cancellation of the cooperation just 3 months after signing, instead of 3 years as planned, surprised public opinion. However, Dave Davis, Director of Content at Protege, a company specializing in licensing audio and images for AI companies to train models, said that this does not mean AI has failed in the entertainment field.

He said Disney is still willing to pursue licensing agreements with other companies in the field of AI video creation, such as Google, Runway, Luma, Moonvalley, Kling and Seedance.

As OpenAI tries to shift away from sideline monetization efforts, such as social network development, Internet browsers, subscription models and advertising, as well as push to build programming and enterprise tools, it will increasingly compete directly with Anthropic, which has been focused on the enterprise sector and is the market leader.

CEO Sam Altman in October 2025 announced that OpenAI was “aggressively investing”, but this has turned into “aggressively trying to please investors”, especially when the company is planning an initial public offering this year.

“As billions of dollars continue to pour into the AI ​​industry, investors will begin to look more closely at whether they are profitable and which businesses may become bubbles,” writer Hayden Fields of The Verge comment.