OpenAI kills off Sora as AI companies struggle with relevance and making money

OpenAI's Sora generative video tool made Tyler Perry pause an $800 million studio build when it was announced and triggered a $1 billion Disney deal. Now the Sora app has been killed off. What happened?

News that OpenAI has killed off Sora, the app that was to bring down Hollywood, broke on the same afternoon that I actually found a compelling enough Apple Intelligence feature, Playlist Playground, in the new iOS 26.4 that made me think of upgrading my phone to use it.

The ability to put together 25-song playlists in Apple Music from a prompt sounds like a winner to me. And hey, it only took Apple two years to release something that makes this user feel like an iPhone upgrade might be worthwhile (and that Spotify rolled out last year, while Amazon Music and Deezer had it in 2024). 

If that sounds a little off-topic, it isn't. AI companies have a growing problem at the moment in that they are utterly failing in making a use case for their products. 'Build it and they will come' is all very well as a sentiment, but not so much when you are in peril of destabilizing the world economy just to invest trillions of dollars in erecting data centers that no one might use.

And Sora's cancellation shows just how deep the problem is.

Mind the gap

We probably don't need AI to add more cat videos to the internet (though you can never have enough)

The gap between what AI companies announce and what actually makes consumers act has never been greater. Sora was announced to global headlines, the app went viral, topped the App Store — and only six months later it's gone, killed off by compute costs and a pivot toward enterprise.

A report from Reuters says it has faced the axe for some time. Running the AI video app required significant compute and pulled resources from elsewhere in the company. CEO Sam Altman has publicly stated that the company needs to focus less on 'side quests', and needs to concentrate more on money making opportunities such as robotics and building artificial general intelligence.

This apparently all came as sudden news to Disney, which as recently as December 2025 said it was investing $1bn into OpenAI and licensing more than 200 of its characters from Mickey Mouse to Marvel's Avengers so that "Sora will be able to generate short, user-prompted social video."

That deal has now ended, reportedly before Disney handed any money over, which will help soothe its execs' ruffled feathers at least.

Video development continues elsewhere

So, while OpenAI looks to concentrate its capabilities on what is rapidly becoming the AI industry's 'grail quest' of a single desktop super-app, development continues elsewhere.

Adobe only last week added further agentic features to its Firefly AI video generator, and at the NVIDIA GTC event last week, the Runway AI video model was shown in a research preview generating real-time video with a sub-100 ms time to first frame. Then, of course, there's all the fuss over Seedance 2.

The fact that Firefly now supports over 30 different third-party AI models shows there's no lack of choice out there. The question though is can the eye-watering amounts of development and infrastructure build stay ahead of the debt that is rapidly building behind them? 

If even a stupidly well-resourced company such as OpenAI — which announced a $110bn fundraising round in February —is having to pivot away from certain areas, it looks like not everyone can wait two years to develop a feature that might persuade people to part with their money.