OpenAI Shuts Down Sora After Burning $1M Per Day
OpenAI is discontinuing its AI video generator Sora after fewer than 500,000 users and unsustainable compute costs killed the product — and a $1B Disney deal with it.
OpenAI announced on March 24 that it is shutting down Sora, its text-to-video generator, in both the mobile app and the API. The app will go dark on April 26, and the API follows on September 24. Six months after launch, Sora is dead.
The Numbers Tell the Story
Sora's worldwide user count peaked at around one million, then collapsed to fewer than 500,000 active users. Meanwhile, the product was burning through roughly $1 million every single day. A single 25-second Sora 2 video cost OpenAI approximately $18 in raw compute, while users paid only $4–$8 per clip. That math created an unsustainable burn rate exceeding $120 million per month.
OpenAI stated the Sora research team "continues to focus on world simulation research to advance robotics," adding that the company needed to "make trade-offs on products that have high compute costs." Translation: Sora was a money pit nobody was using.
Disney Found Out an Hour Before You Did
The collateral damage extends beyond OpenAI's balance sheet. Disney had committed $1 billion to a partnership built around Sora. According to The Hollywood Reporter, Disney learned about the shutdown less than one hour before the public announcement. The deal died with it.
That level of communication failure with a billion-dollar partner says something about how fast this decision came together internally.
Who Benefits?
Kling AI, owned by China's Kuaishou Technology, saw global weekly active users jump 4% to 2.6 million in the week following the announcement, according to Bloomberg. Runway, Vidu, and ByteDance's Seedance are all absorbing displaced Sora users.
The AI video generation market hit an estimated $1.1 billion in total revenue in 2025, with Kling capturing roughly 27% market share by ARR. Analysts project the market will exceed $2.5 billion by end of 2027 — Sora or not.
Our Take
Sora's failure isn't about bad technology. The model produced impressive results. It's about AI video generation being too expensive to give away and too niche to charge enough for. Every competitor in this space should study this outcome carefully. If OpenAI — with its $25 billion in annualized revenue — couldn't make the economics work, the viability question applies to everyone.