GoKawiilis The Verge’s senior AI reporter. An AI beat reporter for more than five years, her work has also appeared in CNBC, MIT Technology Review, Wired UK, and other outlets.
On Tuesday morning, everything was business as usual at OpenAI. By the end of the day, the company had announced that it would scrap its video-generation app, Sora, and reverse plans for video generation inside ChatGPT; it would wind down a $1 billion Disney deal; it would shuffle the role of a high-level executive; and it would raise an additional $10 billion from investors, adding up to more than $120 billion total for its latest funding round.
OpenAI is now in a frenzy to turn a profit, or at least lose less money. Since its launch, Sora seems to have taken up a massive amount of compute without the financial return to justify it. Industry sources told The Verge that it’s been lagging behind competing video-generation models. But despite its short life, it’s leaving behind a legacy of eroded trust in judging what’s real.
As OpenAI faces questions from investors and hot competition from Anthropic and Google, executives seem to agree that a change in direction is warranted. “We cannot miss this moment because we are distracted by side quests,” Fidji Simo, OpenAI’s CEO of AGI deployment (after being moved from her role as CEO of applications), reportedly told staff recently. “We really have to nail productivity in general and particularly productivity on the business front.” That means backing off projects like Sora, as well as reportedly deprioritizing the “adult mode” sexting capabilities it had been exploring for ChatGPT.
Sora was already struggling to compete in the cutthroat AI video generation industry, according to Trevor Harries-Jones, board member at the Render Network Foundation, a nonprofit that allows creators to explore and compare AI-generated video on its platform.
“The state of innovation and the plethora of choice means there’s just little to no moat and it’s very simple to switch between,” Harries-Jones told The Verge. “If your model is not the top at any one thing, it’s very hard to get mass usership.”
Harries-Jones said that he would guess OpenAI’s decision is due to the “staggering” rate of innovation in the video-generation part of the AI industry and steep competition from companies including Google and Kling.
“For us, there wasn’t anything that they were winning, in terms of one of the use cases,” Harries-Jones said, so Sora didn’t have an obvious edge. “It had fallen off from really a very strong start, to be eclipsed by some of the other competitive players in the space.” He also said that the announcement of Sora and the marketing videos seemed “groundbreaking” but that there was a “gap” between the buzzy demo videos and the actual launch. “As with all these, the devil is in the details on the cost, the timeframe that can be generated, and more,” he said.
Sora’s user struggles may be reflected in download numbers from Sensor Tower, a market intelligence firm. Seema Shah, the firm’s VP of insights, told The Verge that Sora was “one of the fastest-growing apps when it first launched” but that it “really dropped off” after a couple of months, potentially due to competition from Google and other companies. Sora started off strong in October with about 4.8 million worldwide downloads and 6.1 million in November, followed by a sharp drop-off in December (3.2 million) and in the following months: 2.1 million in January, 1.4 million in February, and just 1.1 million month-to-date for March.
“What’s most notable about it is dropping off while they’re expanding into new markets — that should be driving growth,” Shah said, adding, “You should’ve seen an uptick in that. Even if nobody else in the US downloaded it again, there should be some growth, presumably.”
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