OpenAI Killed Sora. Disney’s Billion-Dollar Deal Is Dead.
The big picture: OpenAI is shutting down Sora and winding down all products that use its video models, according to The Wall Street Journal. CEO Sam Altman told staff the company is reallocating resources to compete with Anthropic by building AI productivity tools for coders and corporate users. The Disney deal that would have given Sora users access to popular characters is reportedly dead.
Why it matters: The most hyped AI video product in the world lasted less than two years. OpenAI is pivoting from the product everyone was afraid of to one most people haven’t heard of. Also today, Bernie Sanders and AOC announced legislation to ban new AI data center construction until Congress passes federal regulations. The bill almost certainly won’t pass, BUT it signals growing bipartisan and public demand for guardrails the industry is spending millions to prevent.
The shutdown: Altman told staff that OpenAI will wind down all products using its video models, including the Sora app, a developer version, and video functionality inside ChatGPT, according to The Wall Street Journal. The standalone Sora app became the most-downloaded in the iOS Photo and Video category within days of its October launch.
The Disney collapse: Two months after Sora’s app launch, Disney announced a $1 billion investment in OpenAI built around giving Sora users access to Disney characters. That deal is now reportedly dead.
The reason: Anthropic. OpenAI’s biggest competitor has avoided image and video generation entirely, instead building productivity tools for software engineers and corporate users. That strategy has driven faster revenue growth than OpenAI’s. Some OpenAI employees were reportedly surprised when the company poured computing resources into Sora given the lack of clear demand. Now OpenAI is reallocating those resources toward AI agents and enterprise tools, consolidating ChatGPT, Codex, and Atlas into one “superapp.”
The data center fight: Also today, Bernie Sanders and AOC announced legislation that would ban new AI data center construction until Congress enacts federal regulations, including government review of new AI products, job displacement protections, climate safeguards, and union labor requirements.
Bernie: “We cannot sit back and allow a handful of billionaire Big Tech oligarchs to make decisions that will reshape our economy, our democracy and the future of humanity.”
The bill is widely seen as symbolic. BUT since August 2025, multiple towns and counties have passed temporary bans on data center construction, at least 11 states are considering similar legislation, and over 200 advocacy groups have urged Congress to act.
By the numbers:
$1 billion — Disney’s investment in OpenAI, now reportedly dead
$13 billion — OpenAI’s revenue last year
$100 billion — OpenAI’s projected spending over four years
11 — states considering data center construction limits
200+ — advocacy groups that urged a federal moratorium
The bottom line: The biggest AI company just killed its most famous product because the economics didn’t work, Disney lost a billion-dollar bet, and the industry is spending billions on data centers and millions on political campaigns to make sure nobody can slow them down, even as public support for regulation keeps growing. OpenAI proved that even inside the industry, nobody knows what’s going to stick. Maybe that’s exactly why letting them build without guardrails is such a bad idea.
The Wall Street Journal | NBC News
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This sucks... it's also concerning. I've enjoyed using Sora for personal, entertainment purposes. Now its going away. What's concerning is how much the AI landscape seems to be changing. I don't even understand what's going on with AI anymore. Would love if Phil did a whole deep dive on the subject. What AI is, where it came from, what's it being used for, and what's the future.