By Dawn Chmielewski and Deepa Seetharaman
March 24 (Reuters) – On Monday evening, Walt Disney Co and OpenAI teams were working together on a project linked to Sora, OpenAI’s AI video tool. Just 30 minutes after that meeting, the Disney team was blindsided with word that OpenAI was dropping the tool altogether, a person familiar with the matter said.
OpenAI announced the move publicly on Tuesday.
“It was a big rug-pull,” according to the person, who requested anonymity to discuss the matter.
The move is the first big step by the ChatGPT maker to focus its business on potentially more lucrative areas such as coding tools and corporate customers.
But the abrupt cancellation of Sora illustrates how messy the streamlining process may become as OpenAI prepares for a stock market debut that could come as early as later this year.
The Sora decision means the end of a blockbuster $1 billion deal between Disney and the ChatGPT maker that was announced a little more than three months ago. As part of the three-year deal, Disney said it would invest $1 billion in OpenAI and lend more than 200 of its iconic characters to be used in short, AI-generated videos.
But the transaction between the companies never closed, two other people familiar with the matter said, and no money changed hands.
OpenAI executives have been debating Sora’s fate for some time. Running the AI video app required significant computational resources, a fourth person with knowledge of the matter said, and left other teams with less firepower.
Even so, some OpenAI staffers on the Sora team were surprised when they were informed of the changes Tuesday morning, one of the people and another source said. The announcement was made just a day after OpenAI published a blog post about Sora safety standards.
“We’re saying goodbye to Sora … we know this news is disappointing,” the Sora team said in a post on X, adding that timelines for the app and API, as well as details on preserving user work, would be shared later.
OPENAI FOCUSES ON A SUPER-APP
OpenAI executives are now focusing on other research areas, including robotics and building artificial general intelligence. The company is rolling more of its capabilities into a single super-app. To reflect that shift, Fidji Simo’s title was changed from CEO of applications to CEO of AGI deployment.
Separately, CEO Sam Altman said OpenAI’s security and safety teams would no longer report directly to him.
A spokesperson for Disney said that the media giant respects “OpenAI’s decision to exit the video generation business and to shift its priorities elsewhere.”
The two sides are discussing if there is another way they can partner or invest with one another, one of the people familiar with the matter said.
OpenAI first introduced Sora in early 2024, stunning the tech world with software that could generate high-quality, feature film-like videos based on text prompts. The launch prompted AI companies across the U.S. as well as China to ramp up releases of their own AI video-generation models.
The company launched the standalone Sora app in September 2025, letting users create and share AI videos that can be spun from copyrighted content and shared to social media-like streams.
Sora’s cancellation comes as OpenAI faces intensifying pressure to ramp up its enterprise and coding products, as competition from rival AI startups and tech giants heats up.
Anthropic’s focus on training its models on coding has helped its Claude Code product gain strong traction among developers, giving the company an edge over OpenAI and other competitors in the enterprise AI market.
(Reporting by Deborah Sophia in Bengaluru, Juby Babu in Mexico City, Dawn Chmielewski and Lisa Baertlein in Los Angeles, Deepa Seetharaman in San Francisco; Editing by Shailesh Kuber and Edmund Klamann)
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