OpenAI and Disney’s industry-shaking partnership has blown up like the Death Star. Or gone up in flames like Claude Frollo. Or whatever Disney metaphor you think is appropriate.
What happened: OpenAI is shutting down Sora, both its AI video generation model and the standalone app of the same name. The sudden, undignified demise of the project is also the end of the US$1 billion deal OpenAI inked with Disney less than four months ago to licence its IP.
As part of the deal, Sora user-generated videos would have lived alongside actual Disney content on Disney+. Though, reportedly, no money actually changed hands.
Why it’s happening: OpenAI recently told employees they can no longer be “distracted by side quests.” Sora, as it turns out, was the side-iest of all quests, burning piles of cash and eating up precious computing resources so people could make litigation-baiting memeslop.
A ChatGPT query costs OpenAI about half a cent to produce. Per one estimate, video model providers spend $1.30 on a 10-second clip — that’s 25,900% higher.
The app was also never that popular. In December, 25% of its monthly users opened it daily, spending just 13 minutes on it. Usage has surely dipped even further since.
Why it matters: While OpenAI said it isn’t exiting video entirely, and Disney said it’s still exploring AI tools, this massive flop seems to indicate that total AI replacement isn’t coming to Hollywood any time soon. The demand isn’t there and the finances simply don’t add up.
Zoom out: OpenAI will be redirecting its resources and compute to areas with more immediate upside, like robotics and AI models that can navigate the physical world.—QH
