OpenAI Shuts Down Sora App; Scraps $1 Billion Disney Partnership

2026-03-26 - 05:41

OpenAI announced on March 24 that it will shut down its Sora video app to focus computing resources on software coding tools. The sudden closure immediately canceled a planned $1 billion licensing agreement with The Walt Disney Company. According to mobile analytics firm Sensor Tower, Sora recorded 600,000 app downloads in February 2026. A report from venture capital firm Andreessen Horowitz showed that the app hit 1 million downloads within 5 days of its September 2025 release. The same report noted that user retention dropped below 8% within 30 days. The Walt Disney Company and OpenAI announced a $1 billion investment and licensing agreement in December 2025. The contract would have allowed OpenAI to use over 200 Disney characters in Sora. Reuters reported on March 25 that Disney employees learned about the cancellation on March 23, just 30 minutes after a joint project meeting. No money actually changed hands before the deal collapsed. An OpenAI spokesperson told CBS News on March 24 that the company will discontinue Sora across its consumer app and developer platform. “As we focus and compute demand grows, the Sora research team continues to focus on world simulation research to advance robotics that will help people solve real-world, physical tasks,” the spokesperson said. The official Sora team account posted a statement on X on March 24 to announce the closure. “We’re saying goodbye to the Sora app. What you made with Sora mattered, and we know this news is disappointing,” the team wrote. A Disney spokesperson confirmed the end of the partnership in a written statement on March 24. “We respect OpenAI’s decision to exit the video generation business and to shift its priorities elsewhere,” the representative said. Users on the social media platform X expressed immediate frustration on March 24 over the loss of their creative projects. Several video creators questioned whether OpenAI would release the underlying software code to the public. Entertainment industry workers, who previously protested the app over copyright and job security fears, circulated the news widely across online forums. Why Is OpenAI Abandoning Video? Chief Executive Officer Sam Altman is reorganizing OpenAI to focus on high-revenue corporate software. The startup is building a unified desktop application that combines its text generator, ChatGPT, with its software coding tool, Codex. High computer processing costs made video generation difficult to maintain while OpenAI competes directly with rival artificial intelligence firm Anthropic. Anthropic currently sells popular software coding tools to large businesses. The Wall Street Journal reported on March 24 that OpenAI executives want to eliminate side projects as the company prepares for an initial public offering — a process where a private company sells shares to the public to raise money. OpenAI expects to sell stock to the public as early as the fourth quarter of 2026. OpenAI has not provided an exact date for when the Sora application will stop functioning entirely. The company promised on March 24 to share a timeline with instructions for saving users’ generated videos. It remains unknown if Disney will seek a new artificial intelligence partner to replace the canceled agreement. OpenAI first revealed Sora as a research preview in February 2024 before launching the full application in September 2025. The platform allowed users to type short text descriptions to generate realistic, 20-second video clips. The company spent the days leading up to the March 24 closure implementing strict safety filters to prevent users from creating unauthorized videos of public figures and children.