OpenAI Shuts Down Sora After Burning $15 Million Daily at Peak Usage

Quick Facts

• Sora burned $15 million daily at peak usage while generating only $2.1 million in lifetime revenue
• User base collapsed from 1 million to under 500,000 as downloads dropped 66% in three months
• Disney’s $1 billion partnership deal collapsed when OpenAI announced the shutdown with less than an hour’s notice

OpenAI shut down its Sora AI video-generation app on March 24, 2026, just six months after its public launch. The closure came after the app failed to generate sustainable revenue despite massive computational costs.

Sora peaked at around one million users before collapsing to fewer than 500,000. At its height, the app burned through an estimated $15 million per day in inference costs while generating only $2.1 million in total lifetime revenue from in-app purchases.

Downloads fell sharply from 3.33 million in November 2025 to 1.13 million by February 2026—a 66% decline in three months. The app was burning roughly $1 million daily even after user numbers dropped.

Disney Deal Collapses

Disney discovered the shutdown less than an hour before OpenAI’s public announcement. The entertainment giant had committed to a three-year deal worth $1 billion, including licensing agreements for over 200 characters. No money changed hands as the deal was never finalized.

CEO Sam Altman explained the decision in an employee memo, writing: “We want to focus on capital raising, supply chain management, and building data centers at an unprecedented scale.”

Competitive Pressure from Anthropic

The shutdown occurred amid intense competition from Anthropic. While OpenAI focused on Sora, Anthropic’s Claude Code reached a $1 billion annualized run rate just six months after launch—faster than ChatGPT.

Recent data shows Anthropic commands 32% of enterprise large language model utilization, while OpenAI maintains 25% market penetration among business users. At a Seattle meetup, one Google principal engineer publicly acknowledged that Claude reproduced a year of architectural work in one hour.

OpenAI has been in “code red” mode since December. CEO of applications Fidji Simo told workers they would eliminate “side quests” to focus on “productivity on the business front.”

Technical Challenges and Content Issues

Sora faced ongoing problems with deepfakes, including unauthorized videos of public figures like Martin Luther King Jr. and Robin Williams. Their daughters publicly asked users to stop creating such content. Even on shutdown day, antisemitic content remained on the platform despite OpenAI’s guardrails.

The technology behind Sora was designed to simulate physical reality, with video generation as a byproduct. OpenAI plans to redirect this capability toward robotics applications.

The closure comes as OpenAI prepares for an initial public offering to justify its $730 billion valuation. Industry analysts view the shutdown as concerning for a company planning to go public after abandoning a prominent product and major corporate partnership.

Read more: Why OpenAI really shut down Sora