Why OpenAI killed Sora | The Verge

Tuesday morning, everything was going as usual at OpenAI. By the end of the day, the company had announced that it would discontinue its video generation application, Sora, and cancel its plans to generate video in ChatGPT; it would end a billion-dollar deal with Disney; it would change the role of a senior manager; and it would raise an additional $10 billion from investors, making a total of more than $120 billion for its latest funding round.

OpenAI is now frantic to make a profit, or at least lose less money. Since its launch, Sora seems to have used a lot of computing without the financial return justifying it. Industry sources said The edge that it lags behind competing video generation models. But despite its short lifespan, it leaves behind a legacy of eroded confidence in judging reality.

As OpenAI faces questions from investors and stiff competition from Anthropic and Google, executives appear to agree that a change in direction is warranted. “We can’t miss this moment because we’re distracted by side quests,” Fidji Simo, CEO of OpenAI’s AGI deployment, reportedly recently told staff (after being removed as CEO of Applications). “We really need to get a handle on productivity in general and commercial productivity in particular. » That means stepping back on projects like Sora, as well as deprioritizing the “adult mode” sexting capabilities he explored for ChatGPT.

Sora was already struggling to compete in the cutthroat AI video generation industry, according to Trevor Harries-Jones, a board member of the Render Network Foundation, a nonprofit that lets creators explore and compare AI-generated videos on its platform.

“The state of innovation and plethora of choice means there is little or no gap and it is very simple to move from one to the other,” Harries-Jones said. The edge. “If your model is not the best in a particular area, it is very difficult to get mass usage.”

Harries-Jones said he would assume OpenAI’s move is due to the “staggering” rate of innovation in the video generation sector of the AI ​​industry and strong competition from companies such as Google and Kling.

“For us, they weren’t gaining anything, in terms of one of the use cases,” Harries-Jones said, so Sora didn’t have a clear advantage. “It had fallen off after a very strong start, only to be overshadowed by some of the other competitive players in the industry.” He also said that Sora’s announcement and marketing videos seemed “groundbreaking,” but that there was a “gap” between the animated demo videos and the actual launch. “As with all of this, the devil is in the details, on the cost, the time frame that can be generated, and much more,” he said.

Sora users’ struggles may be reflected in download figures from Sensor Tower, a market information company. Seema Shah, vice president of insights at the firm, said The edge that Sora was “one of the fastest growing apps when it launched” but that it “really tanked” after a few months, potentially due to competition from Google and other companies. Sora started strong in October with around 4.8 million downloads worldwide and 6.1 million in November, followed by a sharp decline in December (3.2 million) and in the following months: 2.1 million in January, 1.4 million in February and only 1.1 million since the beginning of March.

“What’s most notable is the decline as they expand into new markets – that should drive growth,” Shah said, adding: “You should have seen an uptick. Even if no one else in the U.S. downloaded it again, there should probably be some growth.”

The video generation consumed a lot of expensive computing power at a time when OpenAI desperately needed it. In October, at the company’s annual DevDay event, OpenAI executives repeatedly expressed the need to generate more revenue and concerns about how compute constraints could prevent OpenAI from growing. “Obviously, one day we have to be very profitable,” OpenAI CEO Sam Altman said at the time, mentioning that the company was in an “aggressive investment” phase.

That same day, company president Greg Brockman told reporters, “How much compute do you want? ” is a bit like asking, “How much of the workforce do you want?” » The answer is that you can always get more out of more. OpenAI also launched ads in ChatGPT Pulse at the time, which turned into ads in ChatGPT last month.

The increase in revenue is further thwarted by the loss of the Disney deal. Last year, the entertainment giant pledged a $1 billion equity investment in OpenAI with the option for Disney to purchase additional shares, and it also stipulated that Disney would become a “major customer” of OpenAI, using the company’s products to create new products for Disney+ and the rest of the company, while making ChatGPT available to employees. The deal also allowed Sora to feature AI-generated videos of hundreds of characters from Disney, Pixar, Star Wars and Marvel, a selection of which would be available to stream on Disney+ itself. Then, apparently less than an hour after OpenAI and Disney worked together on a Sora-related project, Disney was blindsided by the plan to discontinue the app.

The quick cancellation of the OpenAI-Disney partnership – just over three months into a three-year licensing deal – seemed to be the biggest surprise to the public. While some online chatter suggests this demonstrates a larger failure of AI in entertainment, Dave Davis, chief content officer at Protege, which licenses audio and visual content to AI companies for training models, said it’s clear that Disney is still very open to licensing deals with other companies working on video-generating AI. This could potentially involve partnering with companies like Google, Runway, Luma, Moonvalley, Kling or Seedance.

“We’re seeing a lot of momentum in the licensing space,” Davis said, adding that for well-known companies like Disney, it’s usually a strategic play to inspire fan interaction in new ways. “The Disney-OpenAI deal was a sign of that. I think it’s great that, in the release announcement, Disney made it clear that it was wide open to pursuing character licensing with other parties.”

News of Sora’s shutdown came a day after OpenAI published a blog post about how to use Sora safely, saying the company was continuing to “strengthen Sora’s guardrails” and introduce stronger protections for videos featuring children and teens. OpenAI also reportedly planned earlier this month to integrate Sora’s video generation capabilities into ChatGPT itself, before abandoning that strategy.

“We have decided to discontinue Sora in the consumer app and API,” OpenAI spokesperson Kayla Wood said. The edge in a press release, pointing to an article “As we focus and demand for computing increases, the Sora research team continues to focus on global simulation research to advance robotics that will help people solve real-world physical tasks.”

OpenAI also said it needs to focus its existing calculations on its AI agent goals and that Sora is a step toward the goal of better research into global simulation, particularly robotics. Fittingly, the original post announcing the end of Sora was changed, possibly to lay the groundwork for OpenAI’s continued work on world simulation AI, which could very well use the AI ​​model behind Sora to continue its work.

As OpenAI works to turn away from a wave of money-making efforts — like forays into social media, new browsers, new subscription tiers, new advertising plans and new government contracts — and expand its resource output into coding and enterprise tools, it will compete even more directly with Anthropic. Its rival has built a reputation as a clearly enterprise-oriented company and is a market leader, at least in many respects, when it comes to coding tools.

Sam Gregory, executive director of Witness, a nonprofit that fights deceptive AI and deepfakes, says he’s not sorry about the loss of a tool for generating “AI slops.” But he is furious that “in the absence of real money, real investment and real will” things seem to be changing only for commercial reasons and not for real harm.

“Sora launched with a bang its ability to create hyper-realistic content… what angers me is what they’ve standardized in six months, a set of things that I think have really lasting implications,” Gregory said. “They’ve normalized a world where, within seconds, people are really unsure of what they’re seeing in their timeline, both when it matters and when it doesn’t matter…whether it’s a casual comedy…or images of conflict in Iran.” He added: “The consequences will reverberate even if the app disappears. »

Altman’s statement in October that the company was “investing aggressively” now appears to have morphed into an aggressive attempt to appease the company’s own investors, especially since OpenAI reportedly intends to have an IPO as early as this year. As billions of dollars continue to flow into the AI ​​industry, investors are starting to take a closer look at whether they’re getting a return and which parts of the industry could be a bubble.