OpenAI shut down Sora, its AI video generation tool, just six months after its public release, according to a TechCrunch report citing a Wall Street Journal investigation published March 29, 2026. The real reason was financial: Sora was burning roughly $1 million per day while its user base had collapsed from a peak of around one million to fewer than 500,000.
The WSJ investigation revealed that CEO Sam Altman made the decision to kill Sora and redirect compute resources after Anthropic began winning over software engineers and enterprises. “Claude Code, in particular, was eating OpenAI’s lunch,” the report noted, referring to Anthropic’s coding tool that has gained significant developer traction.
The shutdown had immediate collateral damage. Disney had committed $1 billion to a partnership involving Sora, according to the WSJ. The entertainment giant’s deal was disrupted by the sudden decision, highlighting the risks companies face when building business strategies around AI tools with uncertain futures.
OpenAI framed the shutdown as resource prioritization rather than failure, stating the underlying video generation technology would be integrated into future products. However, the combination of high compute costs, declining users, and competitive pressure from Anthropic suggests the consumer AI video market faces fundamental economic challenges that extend beyond any single product.
