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OpenAI has spent six months and millions of dollars perfecting what it once called “the most powerful imagination engine ever built.”
There seem to be two important mistakes in Sora’s story.
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OpenAI didn’t understand how consumers were engaging with video on the internet.
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OpenAI underestimated how expensive it would be to run such a power-hungry app.
Eye stain: On Tuesday, OpenAI announced that, to OpenAI’s credit, it would be shutting down Sora, the TikTok-like text-to-video app that made things hyper-realistic. This release marks a turning point for AI-generated video, elevating it from the realm of stupid vulgarity to sophisticated deepfakes (for better or worse).
Sora’s rollback is part of broader changes within OpenAI, which was once the undisputed front runner in the AI race but now faces stiff competition from rivals such as Anthropic and Google.
Earlier this month, OpenAI’s head of applications told staff the company couldn’t afford to “get distracted by sidequests,” the Wall Street Journal reported. The company has been enhancing its core products, including its latest office work-focused ChatGPT and a coding tool called Codex.
Downloads of Sora skyrocketed after its invite-only launch in September, reaching more than 1 million daily active users in just one month, according to data from Samelweb. But the novelty quickly wore off. Usage peaked in early November and has since declined. Downloads are down 70% from November, and daily active users are down 34%.
That was stumbling block number one. OpenAI built a very sophisticated machine and expected everyone to want to use it as much as the engineers did. But AI videos, even the really sophisticated ones, take much of the fun out of scrolling.
For example, the joy humans derive from videos of huskies with what appears to be an Italian accent or cats moving to the beat of Nelly’s 2005 banger “Grillz” comes from knowing that someone experienced something funny in the real world and was able to capture it as it happened. When an AI version of the same thing sneaks into your social feed, it feels like cheating. The person who posted that video didn’t witness anything impressive or unusual, they just typed a few words into a box and uploaded the results.
But beyond the philosophical question of authenticity; It took little time for the Internet to circumvent Sora’s content restrictions. People used the app to generate fake videos of women being strangled, sprayed with mysterious white goo, and people committing crimes. A public figure wearing a Nazi-like uniform. Less than a month after Sora’s release, OpenAI had to pause videos of some historical figures after a user created a “disrespectful depiction” of Martin Luther King Jr. (the app prohibited the use of likenesses of living celebrities, but allowed depictions of those who had passed away).
We’ve seen this kind of stumble with consumers. Previously from OpenAI. ChatGPT-5, announced in August, was a disaster. The new model had a flatter, more concise character and was surprisingly unable to answer basic questions. Users quickly pushed back, forcing OpenAI to backtrack and revert to the old model.
Sora stumble No. 2 was much more mundane, with the cold, realistic glare of a balance sheet. OpenAI appears to have underestimated the cost of its operations. The first sign that Sora’s cash burn was becoming a problem came in late October, when Sora head Bill Peeples posted on X that the “economic situation” was “currently completely unsustainable.”
In November, Forbes estimated OpenAI’s app costs at about $15 million, although OpenAI is still burning through cash faster than it takes in. one day.
The company did not respond to CNN’s questions about its estimates or how much Sola’s financial burden influenced its decision to shut down the app. OpenAI said in a statement that the Sora team will continue to focus on “global simulation research” to advance OpenAI’s robotics efforts.
Conclusion: OpenAI has a mathematical problem. It reportedly had about $13 billion in revenue last year, and aims to triple that by 2026, consuming tens of billions of dollars in computing power. The challenge is forcing the company to give up on revenue drivers it once avoided, such as displaying ads in ChatGPT results, which CEO Sam Altman once derided as a “last resort.” Losing a bet like Sora.
