OpenAI announced this week that it is shutting down its Sora app and related video models just six months after the app was released.
On the latest episode of TechCrunch’s Equity podcast, Kirsten Korosec, Sean O’Kane, and I discussed what the decision means for OpenAI and the industry more broadly. To some extent, the move seems consistent with what we’ve been hearing about OpenAI, as it focuses on business and productivity tools ahead of a potential IPO.
In fact, Kirsten suggested that OpenAI’s decision to shut down Sora was “a sign of maturity that was nice to see in an AI lab.”
But Sora’s shutdown — along with ByteDance’s reported delay in releasing its Seedance 2.0 video model globally — could also be a reality check moment for makers of AI video tools and for evangelists who claim these tools will soon replace Hollywood.
Read a preview of our conversation below, which has been edited for length and clarity.
Anthony: I think it’s worth emphasizing that it’s not just the app. I mean, the app wasn’t very appealing to me, at least, and I think to other people, because it was this idea of a social network without people, where it’s nothing but slop.
But beyond the implementation, it appears that OpenAI is essentially finishing almost everything it does with video. According to the Wall Street Journalthat released some of this news, it’s really about this idea that Open AI – before its potential release to the public – is really trying to focus on business products, enterprise products, programming products. [So] this consumer social app, [and] video in general, is not a priority right now.
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Sean: Yeah, never really used one [the app]. His idea turned me off for several reasons. And you know, it was a good reminder that Open AI — and I don’t mean this to knock them down in any way — but I think that was a reminder, probably, for them internally, of the element of luck […] on how successful ChatGPT has become.
Clearly, there’s something that’s valuable there for people, I don’t want to take that away, because we don’t get to the usage numbers that we’ve heard from them without having something that works well — let alone something that’s been sustained over a number of years and evolved into something that remains important to people.
But there was an element of Sora when it came out, like, “We built the most successful consumer product ever, and now we’re doing it again. And we’re going to bring in Disney and all that.” I think this is just a very harsh reminder that it’s not always going to be an absolute shortcut to the top of the biggest consumer products ever and that there really has to be something that people feel like they’re getting some sort of meaning out of it for it to stick around.
Kirsten: Yeah, I really want to give OpenAI props for this decision, because sometimes we make fun of the whole “move fast and break things” idea, but I think there’s some merit [to] companies that can iterate very quickly and then kill products that don’t work and not feel a sense of failure behind it. I mean, there was actual money lost. If you were looking at the deal with Disney, it was a billion dollar dealbut if you look at — and we don’t have the knowledge of this because we don’t see their balance sheets — but what did they spend on it and what was the long-term value to the company?
And I think while, sure, it was interesting to see what they could create, their decision to shut it down, to me, showed a sign of maturity that was nice to see in an AI lab.
Anthony: As for what it means for OpenAI, it seems very consistent with everything we’ve heard about their strategy going forward. It doesn’t seem like a huge blow or anything in terms of how we think about the future of genetic AI.
Particularly in the video, it’s interesting because right now there have been reports about Seedance, which is ByteDance’s AI production model [for video]. There are reports that [Seedance 2.0 has] delayed because there are engineering and legal issues and basically [figuring out]”Can we build IP protection into it?” Something they obviously hadn’t taken that seriously before.
And so, it’s this reality check moment. There were these really exaggerated statements, including from people inside Hollywood [were] like, “We’re done, this is the future, we just type prompts and make feature films.” And it turns out that for all sorts of technical and legal reasons, it’s not that easy and we’re a long, long way from that happening.
Sean: And the last thing I think we should say about this as well is that this is one of the many decisions that seem to be taking place after Fidji Simo comes in [and began] type of daily operation. This is just a huge dynamic that has changed within OpenAI. And I think the further we get away from that moment of capitalizing on the show, and especially these consumer products and deciding their fate, the easier it will be to look back at this moment and think about what a great moment it was for this company.
