OpenAI Shuts Down Costly Sora Video Tool Amid $15M Daily Burn and Revenue Woes

OpenAI announces the shutdown of its ambitious AI video tool, Sora, after burning an estimated $15 million per day in compute costs while generating only $2.1 million in total lifetime revenue. The decision comes as a significant setback for the company, which had high hopes for Sora's potential to revolutionize the video creation industry.

Discontinuation and Financial Struggles

OpenAI discontinues Sora on March 24, 2026, with the web and app experiences shutting down on April 26, and the API scheduled to close on September 24, 2026. Despite initial excitement and a deal with Disney to license hundreds of branded characters for virtual avatars, Sora's active user base plummets from over one million downloads in its first week to under 500,000. The Disney partnership is also terminated due to the shutdown.

Technical and Legal Challenges

The primary reasons for Sora's failure include extreme generation latency, persistent physics glitches, and legal concerns. Professional creators find the tool frustrating due to its slow performance, and issues such as object permanence failures make the $200 per month Pro tier difficult to justify. Additionally, legal risks arise as tests by The Washington Post show Sora can closely mimic popular content, raising questions about its training data.

Industry Impact and Future Directions

The shutdown of Sora serves as a stark reminder of the financial realities in the AI industry. The compute cost of generating high-quality video at scale remains prohibitively high compared to what consumers are willing to pay. Competitors like Google's Veo 3.1, Runway's Gen-4.5, and Kling 2.5 stand to benefit from Sora's demise, as developers and enterprises look for alternative solutions.

Redirecting Resources

OpenAI redirects the freed compute resources to its next-generation language model, internally called Spud, and to enterprise productivity infrastructure. This move is part of the company's preparation for its anticipated IPO in September 2026. The Sora API deprecation on September 24 gives teams building on it roughly 100 days to migrate to other platforms.

References

• AI News Today June 15 2026: Top 10 AI Stories - unrot.co