In Brief

Posted:

8:09 PM PDT · March 29, 2026

Image Credits:Robert Way (opens in a new window) / Getty Images

- Connie Loizos

Why OpenAI really shut down Sora

OpenAI’s decision last week to shut down Sora, its AI video-generation tool, just six months after releasing it to the public raised immediate suspicions. The app had invited users to upload their own faces — so was this some kind of elaborate data grab? According to a new WSJ investigation, the real explanation is considerably more boring: Sora was a money pit that nobody was using, and keeping it alive was costing OpenAI the AI race.

So what happened? After a splashy launch, Sora’s worldwide user count peaked at around a million and then collapsed to fewer than 500,000. Meanwhile, the app was burning through roughly $1 million every day — not because people loved it but because video generation is so costly to run. Every user who dropped themselves into a fantastical scene was drawing down a finite supply of AI chips.

While a whole team inside OpenAI was focused on making Sora work, Anthropic was quietly winning over the software engineers and enterprises that drive revenue. Claude Code, in particular, was eating OpenAI’s lunch.

So CEO Sam Altman made the call: kill Sora, free up compute, and refocus. If you want to understand just how sudden this was, consider what happened to Disney, per the WSJ: the entertainment giant had committed $1 billion to the partnership, yet found out Sora was being shut down less than an hour before the public. The deal died with it.

Topics

AI, OpenAI, sora, TC

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