Mar 28, 2026
OpenAI shocked both Hollywood and Silicon Valley this week when the ChatGPT maker announced on March 24 that it was shutting down Sora, the AI video generation app it launched at the end of 2025.
The San Francisco-based company released Sora as a dedicated iOS app in September, with a separate Android app following two months later.
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OpenAI is losing much more than just an app. A source familiar with the situation told The Hollywood Reporter that Disney is exiting the deal it signed with OpenAI last December, in which the entertainment giant pledged to invest $1 billion in the company and license more than 200 of its characters for use in Sora (1). According to Axios, no money ever changed hands; the deal simply died (2).
“As the nascent AI field advances rapidly, we respect OpenAI’s decision to exit the video generation business and to shift its priorities elsewhere,” A Disney spokesperson said in a statement to Moneywise. “We appreciate the constructive collaboration between our teams and what we learned from it, and we will continue to engage with AI platforms to find new ways to meet fans where they are, while responsibly embracing new technologies that respect IP and the rights of creators.”
OpenAI did not respond to Moneywise’s request for comment, as well as Disney’s assertion that OpenAI was effectively exiting the video-generation business. Disney and Google are already working together on next-generation robotics for Disney parks, alongside Nvidia (3).
Why Sora had to go
Few could’ve predicted this outcome months ago. Just a day after it launched on iOS, OpenAI’s Sora topped the photo and video category of Apple’s App Store, racking up more than a million downloads in less than five days, according to The Verge (4).
The reason for sunsetting Sora came down to “compute,” which is the raw processing power required to run AI models. In short, Sora was consuming large amounts of energy.
An OpenAI spokesperson told CNN the company needed to trade off products with high compute costs (5). According to Axios, OpenAI is currently prioritizing capital, chips and enterprise products over experimental bets, especially since it’s eyeing a public offering as early as this year (6). OpenAI needs to shore up questions around profitability, as it faces greater competition in AI from Anthropic, the company behind Claude and Google.
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OpenAI is retreating in other areas
While the shutdown of Sora attracted attention, OpenAI quietly announced it was pulling back from Instant Checkout, an in-chat e-commerce feature that let ChatGPT users buy products without leaving the app.
“We’ve found that the initial version of Instant Checkout did not offer the level of flexibility that we aspire to provide, so we’re allowing merchants to use their own checkout experiences while we focus our efforts on product discovery,” the company said in a blog post (7).
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According to Wired, Walmart, the world’s largest private employer, had already walked away from OpenAI’s Instant Checkout feature after internal data showed conversion rates roughly three times lower than its own website (8).
OpenAI is also reassessing other verticals. Earlier in March, CNBC reported that OpenAI was consolidating its web browser, ChatGPT app, and coding tool Codex into a single desktop application. Fidji Simo, OpenAI's CEO of Applications, reportedly told employees that the company was “orienting aggressively” toward high-productivity use cases (9).
OpenAI’s spending problem
Most Silicon Valley giants invested in AI are spending billions on infrastructure, but OpenAI’s financial commitments are particularly staggering (10). In November, CEO Sam Altman wrote on X that OpenAI was “looking at commitments of about $1.4 trillion over the next 8 years.” His company revised that figure in February, telling investors it’s likely to spend a little less than half that — roughly $600 billion — in total compute by the end of the decade.
OpenAI is still profitable. At February’s end, OpenAI said it successfully raised $110 billion, including $50 billion from Amazon, $30 billion from Nvidia and $30 billion from SoftBank.
But the lost revenue is still eye-watering. While OpenAI gained $13.1 billion in revenue in 2025, its projected burn rate for 2026 is about $14 billion. That means the company would still end up spending more than it earns. Given the high cost structure, OpenAI’s route to profitability will not be easy. Going public would only place it under a microscope even further.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
The Hollywood Reporter (1); Axios (2); Disney (3); The Verge (4); CNN (5); CNBC (6); OpenAI (7); Wired (8); Fortune (9); Tech Crunch (10); PC Gamer (11).
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Dave Smith is the VP of content and editor-in-chief at Moneywise and Money.ca. His work has also been published in Fortune, Business Insider, Newsweek, ABC News, and USA Today. He holds a degree from the University of Maryland and lives in Toronto.
