It’s only three months since we brought you news of Disney’s $1 billion investment and licensing agreement with OpenAI. Now it’s all off after OpenAI announced it was shutting down its Sora video generative AI.
What was the deal?
In December 2025, the Walt Disney Corporation reached a landmark agreement with OpenAI. Under the three-year deal, Disney had licensed more 200 Disney, Marvel, Pixar and Star Wars characters for use by Sora. It would have meant that users could generate and share their own AI-generated videos featuring these images. In addition, Disney was set to make a $1 billion equity investment in OpenAI.
What has OpenAI announced?
In a post on X, OpenAI wrote, “We’re saying goodbye to Sora. To everyone who created with Sora, shared it, and built community around it: thank you. What you made with Sora mattered, and we know this news is disappointing. We’ll share more soon, including timelines for the app and API and details on preserving your work. – The Sora Team.” OpenAI is shutting down both its Sora consumer app and the internet-based platform. However, the company hasn’t announced a timescale for the process yet.
What has Disney said?
With the ending of Sora, Disney is ending the licensing agreement and $1 billion investment in OpenAI. A Disney spokesperson told the BBC News website, “We respect OpenAI’s decision to exit the video generation business and to shift its priorities elsewhere.”
Additionally, Disney told The Hollywood Reporter, “We appreciate the constructive collaboration between our teams and what we learned from it, and we will continue to engage with AI platforms to find new ways to meet fans where they are while responsibly embracing new technologies that respect IP and the rights of creators.”
What next?
It’s been reported online that Disney will look to work with other AI platforms. The company is keen to find ways to use generative AI technology without infringing on intellectual property rights. OpenAI has also confirmed that it is going to stop developing video-generation tools. Instead, the company wants to work on creating other forms advanced AI, such as agentic AI. Agentic AI systems are designed to achieve a task with limited human supervision.
What we think
The announcement that Disney was licensing its characters to OpenAI and investing in the company was a huge development in the world of generative AI. Now only three months later it’s all over. Presumably OpenAI’s decision to close down Sora was as big a surprise to Disney as it was to the rest of the world. Agreeing to invest $1 billion dollars is not a decision taken lightly.
Plus, Disney’s deal with OpenAI was set to last three years. With that gone, it leaves at least some of Disney’s future planning in limbo. The coming months will reveal whether OpenAI’s decision to end Sora has wider implications for the world of generative AI.
