Openai pulls the plug on sora: disney deal melts under $1m-a-day burn
Sora is dead. The AI video generator that dazzled Hollywood and snagged a multimillion-dollar Disney partnership vanished from OpenAI’s product roster last week, leaving creators and investors blinking at a blank timeline. Inside the company, the kill switch was labelled “Project Spud.”
Million-user launch, half-million hangover
The app rocketed to one million sign-ups within hours of its February 2024 debut. Phone cameras captured Will Smith eating spaghetti and synthetic skylines that never existed; venture scouts whispered about the next Pixar born in silicon. Then growth flat-lined. By December, daily active users hovered below 500 000—a rounding error beside ChatGPT’s 900 million weekly actives, 50 million of whom pay for the privilege. The reason is brutally simple: each 60-second clip scraped GPU cycles worth a dollar before a single ad or subscription dollar came back.
Engineers familiar with the cluster allocations tell me Sora’s inference bill ran to one million dollars every 24 hours. Even for a firm that has raised more than 17 billion, that is unsustainable burn. The Disney alliance—billed as a content pipeline for theme-park rides and Marvel shorts—never advanced beyond a glossy proof-of-concept. No revenue share materialised; no exclusive catalogue followed. Meanwhile, rivals such as Runway and Stability churned out iterative models at a fraction of the cloud cost, forcing OpenAI into an arms race it could not price-win.
Chips once hot for sora now mine enterprise gold
Instead of mourning, Altman’s team is reallocating the same Nvidia H100 blocks to Spud, an internal platform that stitches GPT-4-o, Codex and a still-unnamed video endpoint into a single enterprise API. The target: Fortune 500 developers who would rather rent reliability than chase virality. Sources close to the roadmap say Spud will debut ahead of the anticipated 2025 IPO, padding the S-1 with recurring B2B dollars instead of whimsical DAU.
Staff have already been redeployed. The robotics division—quietly assembling a mobile manipulator inside an unmarked San Francisco warehouse—received half of Sora’s compute budget overnight. The rest fuels Jony Ive’s mystery device, a curved wearable that reportedly offloads large-language-model queries to the cloud while sipping battery like a Kindle.
OpenAI refuses to call the shutdown a retreat. In a terse memo, chief operating officer Brad Lightcap framed it as “re-focusing generative media on paying professionals.” Translation: if you want cinematic AI, bring a corporate Amex.
The lesson? In the current AI gold rush, attention is cheap, inference is expensive, and venture capital eventually demands more than a viral meme. Sora’s reels were beautiful; the balance sheet was uglier. The screen cuts to black—this time, no sequel in post-production.