Six months ago, OpenAI was going to revolutionize Hollywood.
Now they’re trying to figure out what they actually are.
In the span of 48 hours, OpenAI killed Sora — the AI video app they launched to massive fanfare last year — quietly buried their plans for an adult content chatbot, and announced they’re raising another $10 billion at a $730 billion valuation. All at once. No real explanation. Just a lot of “we’re refocusing.”
That’s a lot of pivoting for a company that’s supposedly winning.
What Actually Happened With Sora
Sora launched as a TikTok-style app six months ago and immediately became the most downloaded app in the iOS Photo and Video category within a day. People were making Mario smoke weed and deepfaking Sam Altman into a pig farm. It was chaos.
By December, the app was seeing a 32% decline in new downloads from November — a time of year when most apps typically flourish.
Then came the Disney deal. Disney inked a three-year licensing agreement that would have let Sora generate videos featuring characters from Disney, Marvel, Pixar and Star Wars, with Disney planning a $1 billion investment in OpenAI as part of the deal. Big. Bold. The kind of partnership that makes headlines.
It’s dead now. All of it.
Disney’s response was pure corporate ice: “We respect OpenAI’s decision to exit the video generation business and to shift its priorities elsewhere.” Translation: we’re furious and we want nothing to do with this.
The reality is that Sora was burning compute, making no money, and causing legal headaches. With an IPO on the horizon, those resources needed to go somewhere that actually generates revenue. So it had to go.
Then There’s the Adult Mode Situation
This one’s a whole story on its own.
Back in October, Sam Altman announced that ChatGPT would soon offer “erotica for verified adults.” OpenAI’s own wellness advisory council — the one they assembled specifically to advise on user safety — was reportedly freaking out over the decision to proceed despite their unanimous objections.
One adviser warned that without major updates, OpenAI risked building what they called a “sexy suicide coach” for vulnerable users who tend to form intense bonds with companion bots.
The company ignored them. Announced it anyway. Then delayed it. Then delayed it again. At one point, OpenAI’s age prediction system was misidentifying minors as adults approximately 12% of the time. At that failure rate, millions of kids could have slipped through.
Now it’s shelved indefinitely. The official line is that they want to “focus on work that is a higher priority.” Which is technically true. It’s just not the whole story.
So What Is OpenAI Actually Doing?
Coding. Enterprise. A superapp.
OpenAI’s current priority is a superapp that combines ChatGPT, its Codex coding agent, and its Atlas web browser. They’re following the same playbook as every other tech company that got overextended: strip it back, find the thing that makes money, build around that.
The $10 billion raise is part of this. OpenAI recently raised $110 billion in fresh funding vaulting the company’s total value to about $730 billion — and they’re raising more. The IPO is coming. And before you go public, you clean house.
Sora was messy. Adult mode was a liability. ChatGPT Shopping was going nowhere. All gone.
The Real Takeaway
OpenAI spent a year trying to be everything. Video. Social. Hollywood. Adult content. Shopping. Browser. Coding agent.
Now they’re admitting that most of it didn’t work.
That’s not a death knell. It’s actually a smart move if they catch it in time. But it does mean the gap between OpenAI’s valuation and OpenAI’s actual focused product strategy is still very real. Meanwhile, competitors like Claude are quietly shipping usable products instead of pivoting every quarter.
They’re worth $730 billion. Meta is betting even bigger on AI while cutting 15,000 people to fund it.
And they just shut down a TikTok clone because nobody was using it.
