Sora shutdown could be a reality check moment for AI video

The Sora app logo appears on your smartphone screen against a blue and purple abstract illustration background. Creteil, France, October 9, 2025 OpenAI’s top-ranked video creation and sharing app is under fire for its ability to create fake news and disregard for copyright laws. (Photo: Samuel Boivin/NurPhoto via Getty Images) Image credit: Samuel Boivin / NurPhoto / Getty Images

OpenAI announced this week that it is shutting down its Sora app and associated video model just six months after the app’s launch.

On the latest episode of TechCrunch’s Equity podcast, Kirsten Korosec, Sean O’Kane, and I discussed what this decision means for OpenAI and the industry as a whole. This move seems to be somewhat in line with what we’re hearing about OpenAI, as it focuses on enterprise and productivity tools ahead of a possible IPO.

In fact, Kirsten suggested that OpenAI’s decision to shut down Sora was “a welcome sign of maturity for AI Labs.”

But Sora’s closure, along with ByteDance’s reported delays in the worldwide launch of its Seedance 2.0 video model, could be a reality check moment for makers of AI video tools and evangelists who say these tools will soon replace Hollywood.

Read a preview of the conversation below, edited for length and clarity.

Anthony: I think it’s worth emphasizing that it’s not just the app. That said, the app wasn’t particularly appealing, at least for me, and I don’t think it would be for others either. Because the idea of ​​this app was to be a social network without people, just a casual social network.

But beyond apps, OpenAI seems to have essentially finished doing almost all the work it does with video. According to the Wall Street Journal, which broke this news in part, this very idea involves Open AI actually looking to focus on business, enterprise, and programming products before potentially going public. [So] This consumer social app [and] Broader video is not a priority at this time.

Sean: Yes, I’ve never actually used it [the app]. When I heard this idea, I wasn’t intrigued for a variety of reasons. And, you know, this doesn’t mean that Open AI actually beats Open AI, but I think it was probably an internal reminder of the element of luck. […] Explain how successful ChatGPT has been.

It’s clear that there is something of value to people. I don’t want to bring that up. Because if we don’t have something working properly, we won’t get the usage numbers that we’re hearing reported. And what’s even more important is what has sustained itself over the years and developed into something meaningful to people.

But when Sora was released, there was an element of, “We built the most successful consumer product of all time, and now we’re doing it again, and we’re going to bring in Disney and all this other stuff.” I think this is a really harsh reminder that it’s not an absolute shortcut to the top of the best consumer products of all time, and that for it to last long it really needs something that people feel like they’re getting some meaning out of it.

Kirsten: Well, I actually want OpenAI to back this decision up. Because even though we sometimes make fun of the whole “move fast and break things” idea, I think it has some value. [to] Companies that iterate very quickly, retire products that don’t work, and have no sense of failure behind them. So there was actually money lost. If you look at the deal with Disney, it was a billion dollar deal. But I don’t know this because I haven’t seen Disney’s balance sheet, but what did Disney spend on this and what was the long-term value to the company?

And while it was certainly interesting to see what they could create, I think their decision to shut it down showed signs of maturity that were great to see in the AI ​​lab.

Anthony: In terms of what that means for OpenAI, this seems very much in line with everything we’ve been hearing about their strategy going forward. This doesn’t seem like a huge blow in terms of how we think about the future of generative AI.

The video is particularly interesting because it also comes around this time of coverage of ByteDance’s generative AI model, Seedance. [for video]. There is also a report that [Seedance 2.0 has] It’s delayed due to engineering and legal issues, but basically [figuring out]”Can we build intellectual property protection into this?” Apparently they haven’t taken it that seriously before.

And that’s this reality check moment. There were some really exaggerated statements, including some from Hollywood people. [were] It’s like, “It’s over, this is the future, all you have to do is fill in the prompts and make a feature film.” And it turns out that for all sorts of technical and legal reasons it is not so easy and we are very far from its realization.

Sean: The last thing to say about this is that this is one of many decisions that seem to be happening after Fiji Simo takes office. [and began] It’s like running a daily routine. This is just a big dynamic that has changed within OpenAI. And I think the further we get away from the moment when she was appointed to run the show, especially these consumer products, and decided its fate, the easier it is to look back on this moment and think about what a big moment it was for this company.

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