OpenAI announced this week that it is shutting down its Sora app and related video models just six months after launch. On the latest episode of TechCrunch’s Equity podcast, Kirsten Korosec, Sean O’Kane, and I debated what the decision means for OpenAI and for the industry more broadly. To some extent, the move seems consistent with what we have been 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 shutter Sora was a sign of maturity that was nice to see in an AI lab.
But Sora’s shutdown, along with ByteDance’s reported delay in launching its Seedance 2.0 video model worldwide, could also be a reality check moment for the makers of AI video tools and for evangelists who claim these tools will be replacing Hollywood anytime soon.
I think it is worth highlighting that it is not just the app. The app was particularly unappealing to me, and I think to other people, because it was this idea of a social network without people, where it is just nothing but slop. Beyond the app, it seems like OpenAI is basically winding down pretty much everything it is doing with video. According to the Wall Street Journal, which broke some of this news, it is really about this idea that OpenAI is, in advance of potentially going public, really trying to focus on business products, enterprise products, and programming products. This consumer social app, and more broadly video, is not a priority right now.
I never really used the app. The idea of it turned me off for a number of different reasons. It was a good reminder that OpenAI, and I do not mean this to knock them down, but I think this was a reminder for them internally of the element of luck in how successful ChatGPT became. Clearly, there is something that is valuable there to people. You do not get to the usage numbers that we have heard reported from them without there being something that is working right, and even more so that it has been kept up over a number of years and developed into something that stays meaningful to people.
But there was an element of Sora, when it came out, of thinking, “We built the most successful consumer product ever, and now we are doing it again. And we are going to bring in Disney and all this stuff.” I think this is just a really harsh reminder that it is not always going to be an absolute shortcut to the top of the greatest consumer products ever and that there really needs to be something that people feel like they are getting some meaning out of for it to stick around.
I actually want to give OpenAI props for this decision. We sometimes make fun of the whole idea of “move fast and break things,” but I think that there is some value to companies that can iterate very quickly and then kill off products that are not working and not feel a sense of failure behind it. There was real money that was lost. If you were to look at the deal with Disney, that was a billion dollar deal. But what were they spending on this and what was the long-term value for the company? While it was interesting to see what they could create, their decision to shutter it, to me, showed a sign of maturity that was nice to see in an AI lab.
In terms of what it means for OpenAI, it seems very consistent with everything that we have been hearing about their strategy going forward. It does not seem like a huge blow or anything like that in terms of how we think about the future of generative AI. Particularly in video, it is interesting because it also comes at this time that there has been reporting around Seedance, which is the ByteDance generative AI model for video. There are reports that Seedance 2.0 has been delayed because there are engineering and legal questions and basically figuring out if they can build IP protections into this, which apparently they had not taken as seriously before.
And so, it is this reality check moment. There were these really hyperbolic statements, including from people within Hollywood, that claimed we are done, this is the future, it is just typing in prompts and making feature films. And it turns out that for all kinds of technical and legal reasons, it is not that easy and we are very, very far from that happening.
The last thing I think we should say about this is this is one of a number of decisions that appear to be happening after Fidji Simo came in and began running the day-to-day operations. That is just a huge dynamic that has changed inside of OpenAI. I think the further we get away from that moment of her being tapped to run the show, and especially these consumer products and decide the fate of them, the easier it will be to look back at this moment in time and think about how big a moment that was for this company.