I really never expected this! Remember last October Sora 2 When it officially launched, not only did the app reach #1 on the US iOS App Store download charts within 48 hours and hit 1 million downloads in five days, but you also had to get an invitation code to use it—you couldn’t just sign up. Yet it was only half a year later thatOpenAI decided to Sora Everything is being shut down, including the iOS app, API, and Sora.com, all of which will cease operations. As a result, the previously announced $1 billion deal with Disney has also fallen through.
OpenAI announces shutdown of Sora! App online for just 6 months before being discontinued, Disney’s $1 billion investment deal falls through as well
OpenAI stated earlier on their official community: “We’re about to say goodbye to Sora, and we’ll share more details soon, including the shutdown timeline for the app and API, as well as instructions for preserving your work.” While no exact shutdown date has been announced yet, it has been confirmed that the iOS app, developer API, and Sora.com experience will all be fully discontinued.
Sora was first previewed in February 2024, and the realism of the generated videos amazed everyone, particularly the video of a woman walking through the streets of Tokyo.
Although it was quickly caught up by competitors, the upgraded Sora 2 model launched in October last year brought significant highlights—it not only supports audio generation but can also easily create short videos of your own digital avatar, and even launched simultaneously on the iOS App. Moreover, to allow users to safely generate Disney characters, OpenAI signed a three-year partnership agreement with Disney in December last year, planning to license classic characters including Mickey Mouse, Cinderella, Marvel, Star Wars, and Pixar for use in Sora, while Disney also intends to invest 1 billion USD in OpenAI.
At that time, OpenAI seemed like it was going to make a big push into the video generation market, but who would have thought that just 6 months later, such a major reversal would suddenly happen.
As for the reasons, there are two: one is the inability to retain users, and the other is the excessively high computing costs.
Below is data from Appfigures. Although the Sora App’s initial downloads were very impressive, they dropped sharply in January this year, falling about 45% to just 1.2 million downloads. Revenue also declined from the peak of $540,000 in December last year to $367,000 in January this year. Its ranking in the US App Store fell even more dramatically, from first place to 101st.
Image source: TechCrunch
According to Medium An article shared that Sora’s 30-day user retention rate is only 1%, meaning out of every 100 people who download it, only 1 is still using it a month later. Overall, the Day 1 retention rate is 10%, dropping to 2% by Day 7, and approaching near 0% by Day 60.
Additionally, revenue also dropped from the peak of $540,000 in December last year to $367,000 in January this year. Its ranking in the US App Store fell even more dramatically from #1 to #101.
Image source: TechCrunch
Next is the computing power issue. AI video generation is extremely resource-intensive. Each video Sora generates consumes far more GPU computing power than typical text or code generation. OpenAI is a startup, unlike Google which already has enormous financial resources and computing power. So rather than using this precious GPU computing power for videos, it’s better to use it for more profitable things, such as code generation, inference, and text services.
This decision may seem like cutting losses, but for OpenAI it’s actually an important strategic adjustment.
First, there’s resource reallocation—shifting the massive GPU computing power originally used for Sora to more commercially valuable areas like code generation, reasoning capabilities, and text generation. These are the core functions that enterprise customers are most willing to pay for, with significantly better profit margins.
Next is preparing for an IPO, which could happen as early as Q4 this year. Streamlining the product lineup and focusing on more profitable businesses at this stage is a relatively positive signal for investors. Continuing to burn through significant resources on a product with just 1% retention would only drag down overall financial performance.
Releasing Sora’s resources would allow OpenAI to accelerate the development of new models, which would also be a good thing for users.
Source: KOCPC Chinese