Sora, OpenAI’s video production app, is history. Here’s what that means for the company’s future
Just six months ago, OpenAI was touting the latest version of its video AI model called Sora as “the beginning of a whole new era” for creators, which it said would bring “greater joy, creativity and connectivity to the world.”
But Sora — a platform that could produce spectacular videos of the now-disappeared Woolly mammoth as easily as a shampoo ad featuring Hitler — was born into a different company than the one that exists today.
OpenAI decided this week to shut it down, citing the need to focus to other important things. It also scaled back some shopping features on ChatGPT and halted the development of the much-maligned “sexy chat” that had promised sexually explicit chat.
The changes give a look that reveals the company that was there he was once the disruptor-in-chief of the AI world, but still now it faces an identity crisis as it struggles to choose a path on the busy road to profitability, according to experts who spoke to CBC News.
“Everyone sees them as a highly skilled organization with first-rate technology that may not have the focus of some of their counterparts on the AI frontier, like Gemini, like Anthropic,” said Sheldon Fernandez, a Toronto-based co-founder. of AI technology company Darwin AI.
OpenAI is on its way to a public offering, and Fernandez says that means they need to raise billions of dollars to pay for things like the staff, data centers and computing power needed to train and use the AI.
“In order to do that, you need to present a specific financial story to investors and the public.”
An identity crisis
So far, that story has taken many turns.
In the beginning a non-profit open source organization, OpenAI has switched to creating closed source models through its for-profit arm. CEO Sam Altman once called ads “a last resort for us,” but introduced them to ChatGPT last month.
After a year of price increases, equity tightening deals sent Wall Street soaring, OpenAI’s partnerships with the likes of Disney and Nvidia have fizzled or failed to live up to their original promise, with Nvidia CEO Jensen Huang reportedly frustrated by OpenAI’s lack of corporate governance.
It just lost a major deal with Apple to Google; and its relationship with Microsoft has grown in intensity.
And ChatGPT’s the quick checkout feature, which led OpenAI to partner with Shopify, Walmart, Etsy and PayPal, it is now reversed.
While it’s common for tech startups to change directions, Fernandez says OpenAI has built a reputation for “reckless behavior” – and struggled to consolidate and monetize consumer-facing products wrapped in those deals.
How did Sora get down to the cutting edge
The decision to dismiss Sora, which was first released in December 2024, came quickly: the previous day, OpenAI had revised its security policy for the video production application.
While Sora took off and, for a time, was king of the mountain in app stores everywhere, Fernandez noted, rival platforms like Google’s Veo, xAI’s Grok and China-owned Kling AI have since emerged to produce video that matches or better than Sora’s offerings.
“It was almost like the TikTok of AI-powered videos,” said Carmi Levy, a technology analyst and journalist based in London, Ont. “And as it turns out, that’s not very attractive to people. There’s no virus, there’s no community. It’s an anti-social social media platform.”
The platform was also, by some accounts, an expensive flop. In November, one analyst suggested that it cost OpenAI $1.30 US to produce one 10-second video. Based on Sora’s estimated 11.3 million daily videos, the analyst said this would cost the company about $15 million every day.
Just a few weeks before that, Sora head Bill Peebles admitted that the stage economy was “completely unsustainable.”
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Sora’s death reportedly came as a surprise to Disney, which announced in December that it would invest US$1 billion in OpenAI, giving Sora users the ability to produce videos featuring their favorite House of Mouse characters.
To that end, OpenAI now appears to be taking notes from its biggest rival Anthropic, Levy explained, by focusing on a suite of products it can sell to businesses and developers.
That could put it on the path to much-needed profits ahead of an initial public offering (IPO).
“It’s very difficult for a company like OpenAI to monetize consumer products like Sora or Instant Checkout,” Levy said.
“It is very easy for them to attract the business market.”
Path to community contribution
The company is hard at work preparing for an IPO that could happen as soon as the end of 2026 – a race to the finish against Anthropic, which is planning a public offering.
But OpenAI needs to clean its financial house before it can do that, Levy said.
Most importantly, investors need to be convinced that OpenAI can actually deliver on its blockbuster deals and justify what is now a $730 billion valuation.
Sam Altman is back as CEO of OpenAI after being fired by the company’s board. Andrew Chang explains why the man famous for bringing ChatGPT to the world was fired, then rehired – and what it might mean for the future of one of the world’s most powerful AI innovators.
“So get rid of projects that don’t make money, get rid of anything that doesn’t grow, get rid of anything that isn’t core to the job or that will make investors question the future of the company,” explained Levy.
A public offering, which would allow the company to list on public markets and sell its shares to everyday investors as a commodity, could mean a lot to OpenAI “in terms of their financial performance,” Fernandez said.
But it will also make the business accountable to its shareholders, forcing more disciplined spending.
“It requires an intelligence that you haven’t seen completely from OpenAI so far,” Fernandez said.
