OpenAI Sora shutdown driven by massive costs and declining usage

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, leading some to wonder if it was an elaborate data grab.

According to a new Wall Street Journal investigation, the real explanation is considerably more mundane. Sora was a financial drain with low usage, and keeping it alive was costing OpenAI the broader AI race.

After a splashy launch, Sora’s worldwide user count peaked at around a million before collapsing to fewer than 500,000.

Meanwhile, the application was burning through roughly $1 million every day. This was not due to overwhelming popularity, but because video generation is exceptionally costly to operate.

Every user who placed themselves into a fantastical scene was drawing down a finite supply of valuable AI chips.

While an entire team inside OpenAI remained focused on making Sora work, rival firm Anthropic was quietly winning over the software engineers and enterprises that drive revenue.

Claude Code, in particular, was rapidly gaining market share at OpenAI’s expense.

Consequently, CEO Sam Altman made the decisive call to kill Sora, free up computing power, and refocus the company’s efforts.

Highlighting the abrupt nature of this decision, the WSJ reported that Disney had committed $1 billion to a partnership with the tool. The entertainment giant found out Sora was being shut down less than an hour before the general public, and the deal died alongside the application.