OpenAI Cancels Sora AI Video Tool, Ending Planned $1B Disney Deal

 

OpenAI Cancels Sora AI Video Tool, Ending Planned $1B Disney Deal

OpenAI has abruptly cancelled its AI video-generation tool Sora, surprising partners and employees and effectively ending a planned $1-billion partnership with The Walt Disney Company.

According to sources familiar with the matter, teams from Disney and OpenAI were still discussing a project related to Sora on Monday evening. Just 30 minutes after the meeting, Disney representatives reportedly learned that OpenAI had decided to discontinue the tool. The decision was publicly announced the following day.

The move also halts a three-year agreement announced earlier this year in which Disney planned to invest $1 billion in OpenAI and allow more than 200 of its iconic characters to be used in AI-generated short videos. However, sources said the deal had not yet closed and no funds had been exchanged.

Sora, first introduced in 2024, gained global attention for its ability to generate cinematic-quality videos from simple text prompts. The standalone app launched in 2025 allowed users to create and share AI-generated clips similar to social media content.

OpenAI executives reportedly decided to drop the project because the system required massive computing resources. The company is now shifting its focus toward more profitable areas, including enterprise AI tools, coding systems, robotics research, and long-term development of artificial general intelligence.

CEO Sam Altman also confirmed internal restructuring as the company prepares for a possible stock market debut later this year. Meanwhile, rivals such as Anthropic continue gaining traction in enterprise AI with developer-focused tools like Claude Code.

Despite the cancellation, Disney said it respects OpenAI’s decision and that discussions about future collaborations between the two companies may continue.