Sending Sora to the scrapheap is probably the right play for the more operationally focused OpenAI (OPAI.PVT).
Originally teased in early 2024, Sora launched as a standalone social video app in September 2025. It came with a TikTok-like feed and a “cameo” feature that let users insert themselves into AI-generated scenes.
Media giant Disney (DIS) became the first major studio to license intellectual property to OpenAI for use in Sora. The three-year deal allowed Sora users to generate AI videos featuring Disney characters like Mickey Mouse.
All of that is dead in the water. OpenAI said late Tuesday it would shut down Sora as it continues to streamline the number of products it’s working on. The Disney partnership is no more.
“We are not overly surprised by OpenAI’s decision to shut down Sora given downloads and engagement have waned and there is clearly a very attractive enterprise opportunity to pursue right now (as evidenced by the success of OpenAI’s Codex and Anthropic’s (ANTH.PVT) Claude Code),” KeyBanc Capital Markets analyst Justin Patterson said in a note on Wednesday.
“For consumer Internet investors, we would view this as one more sign that businesses still have moats that are not easily overcome across verticals like social, video, music, and marketplaces,” he said.
The two charts below from Patterson’s team underscore Sora’s underwhelming performance.
Monthly active users (MAUs) peaked in December but declined in 2026. Meanwhile, downloads grew rapidly but fell to just over 1 million in February.
“Even with all of OpenAI’s resources, Sora could not attract and retain an engaged audience,” Patterson added.
OpenAI — valued at $840 billion, according to Yahoo Finance private markets data — is now heads down on the fundraising front.
The Sam Altman-led company reportedly scored another $10 billion in investment, led by top names like Andreessen Horowitz. OpenAI raised a $110 billion tranche in February, backed by Amazon (AMZN), Nvidia (NVDA), and Softbank (SFTBY).
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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