Sam Altman pulls Sora plug as Disney’s $1bn OpenAI deal collapses – Business News Nigeria

BusinessDay
Anthony Udugba
March 29, 2026
Sam Altman pulls Sora plug as Disney’s $1bn OpenAI deal collapses
OpenAI has ended its stand-alone Sora text-to-video app, causing Disney’s planned $1 billion investment in the company to collapse. The Sam Altman-led artificial intelligence firm announced on Tuesday that it is shutting down the Sora app. No money from the Disney deal changed hands, as the agreement was never completed, sources familiar with the matter said.
Disney and OpenAI reached a deal in December 2025. Under its terms, Disney agreed to invest $1 billion in OpenAI in the form of equity and warrants. In return, OpenAI would license more than 200 characters from Disney, Marvel, Pixar, and Star Wars for use in Sora videos. The partnership was expected to start this spring.
A Disney insider told Deadline that “the deal is not moving forward.” The companies had discussed the investment during Disney’s February earnings call, with then-CEO Bob Iger highlighting the planned collaboration.
OpenAI said in a statement: “We’re saying goodbye to Sora. To everyone who created with Sora, shared it, and built a 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 company is shifting focus away from the consumer-facing video app as it moves toward a broader mega-app strategy and other priorities, such as robotics and world simulation research.
Sora remains available for now, and Disney characters can still be used in it. However, the licensing arrangement is set to end with the app’s closure. It is unclear whether OpenAI will continue to have access to the characters.
Disney, now led by Josh D’Amaro, responded calmly to the development. “As the nascent AI field advances rapidly, we respect OpenAI’s decision to exit the video generation business and to shift its priorities elsewhere,” a company spokesperson said. “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.”
The collapse ends what was seen as a significant step in bridging Hollywood intellectual property with generative AI tools. The deal aimed to let users create short videos featuring iconic characters while giving Disney a stake in one of the leading AI companies.
OpenAI launched Sora as a text-to-video tool that turned simple prompts into realistic clips. The stand-alone app version drew attention for its creative potential but also raised questions about copyright and content control in the entertainment industry.
No cash licensing fee was involved in the Disney agreement; the investment took the form of stock warrants. With Sora now being discontinued, both sides have chosen to walk away from the partnership.
The move comes as OpenAI simplifies its product lineup amid growing competition in AI video generation and increasing demands on its computing resources.

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