OpenAI Shuts Down Sora and Ends Disney Partnership

OpenAI has shut down Sora, its AI video generation tool, less than two years after its launch made headlines and just three months after striking a $1 billion deal with Disney.

The company announced the shutdown on Tuesday, saying it was discontinuing both the consumer app and the professional API. "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," the Sora team wrote on X.

The timing caught Disney entirely off guard. According to a person familiar with the matter, Disney's teams were actively working on a Sora-related project on Monday evening and were only told of the shutdown about 30 minutes after that meeting ended. "It was a big rug-pull," the person said. 

The Disney deal, which had been announced in December and would have seen the studio invest $1 billion in OpenAI and license more than 200 characters from Disney, Marvel, Pixar and Star Wars for use in AI videos, reportedly never actually closed. According to two people with knowledge of the situation, no money ever changed hands.

A Disney spokesperson said the company "respects OpenAI's decision to exit the video generation business and to shift its priorities elsewhere," adding that it would continue engaging with other AI platforms to find ways to use the technology while "respecting IP and the rights of creators." The two sides are reportedly still discussing whether there is another form of partnership or investment possible.

Disney's deal with OpenAI had been seen as a significant turning point in relations between Hollywood and the AI industry, following a wave of legal actions studios had taken against AI companies for alleged copyright infringement. With that partnership now dissolved, Disney said it would keep exploring AI with other platforms while remaining vigilant about protecting its intellectual property.

OpenAI told the BBC it was shutting down Sora to focus on other areas, specifically robotics and what it described as "agentic" technology capable of completing tasks with minimal human oversight. The company said it plans to apply the same training techniques developed for video generation to teaching robots. Its image-making tools within ChatGPT are unaffected, though ChatGPT will no longer generate video responses from text prompts.

Behind the scenes, the decision had apparently been building for some time. Running Sora required substantial computing resources, leaving other teams with less capacity, according to a person familiar with the matter. The shutdown of Sora is also part of a broader push to streamline the company ahead of a stock market listing that could come later this year. To reflect the shift in focus, Fidji Simo's title was changed from CEO of Applications to CEO of AGI Deployment.

Still, the closure surprised some Sora team members, with the shutdown of Sora coming just a day after OpenAI had published a blog post about Sora's safety standards. The decision also signals a strategic retreat from the AI video market at exactly the moment that competition in that market is intensifying. Rivals including China's Seedance have been gaining ground, and ByteDance's Seedance 2.0 recently received copyright breach warnings from Disney, Paramount, Warner Bros., Sony and Netflix.

Sora itself had been controversial since its second version launched in September 2025 under an opt-out model that required IP owners to proactively flag that they wanted their content excluded from being used by Sora. Japan's CODA, whose members include Studio Ghibli, sent OpenAI a formal demand in November to stop using their material to train the system.