OpenAI announced this week that it is shutting down its Sora app and associated video model, just six months after the app’s launch.
On the latest episode of TechCrunch’s Equity podcast, Kirsten Korosec, Sean O’Kane, and I discussed what this decision means for OpenAI and the industry as a whole. This move seems to be somewhat in line with what we’re hearing about OpenAI, as it focuses on enterprise and productivity tools ahead of a possible IPO.
In fact, Kirsten suggested that OpenAI’s decision to shut down Sora was “a welcome sign of maturity for AI Labs.”
But Sora’s closure, along with ByteDance’s reported delays in the worldwide launch of its Seedance 2.0 video model, could be a reality check moment for makers of AI video tools and evangelists who say these tools will soon replace Hollywood.
Read a preview of the conversation below, edited for length and clarity.
Anthony: I think it’s worth emphasizing that it’s not just an app. That said, the app wasn’t particularly appealing, at least for me, and I don’t think it would be for others either. Because the idea of this app was to be a social network without people, just a casual social network.
But beyond apps, OpenAI seems to have essentially finished doing almost all the work it does with video. According to the Wall Street Journal, which broke this news in part, this very idea involves Open AI actually looking to focus on business, enterprise, and programming products before potentially going public. (So) this consumer social app, and (and) video more broadly, are not a priority at this point.
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Sean: Well, I’ve never actually used[the app]. When I heard this idea, I wasn’t intrigued for a variety of reasons. And you know, this was a nice reminder of Open AI — and I’m not really trying to beat them up — but I think it was probably a reminder, internally, that there was an element of luck (…) in ChatGPT’s success.
It’s clear that there is something of value to people. I don’t want to bring that up. Because if we don’t have something working properly, we won’t get the usage numbers that we’re hearing reported. And what’s even more important is what has sustained itself over the years and developed into something meaningful to people.
But when Sora was released, there was an element of, “We built the most successful consumer product of all time, and now we’re doing it again, and we’re going to bring in Disney and all this other stuff.” I think this is a really harsh reminder that it’s not an absolute shortcut to the top of the best consumer products of all time, and that for it to last long it really needs something that people feel like they’re getting some meaning out of it.
Kirsten: Yeah, I actually want to give OpenAI the backing for this decision. Because sometimes we make fun of the whole idea of ”move fast and break things.” But I think there’s some value in companies that iterate very quickly, retire products that don’t work, and don’t feel a sense of failure behind it. So there was actually money lost. If you look at the deal with Disney, it was a billion dollar deal. But I don’t know this because I haven’t seen Disney’s balance sheet, but what did Disney spend on this and what was the long-term value to the company?
And while it was certainly interesting to see what they could create, I think their decision to shut it down showed signs of maturity that were great to see in the AI lab.
Anthony: In terms of what that means for OpenAI, it seems very consistent with everything we’ve been hearing about their strategy going forward. This doesn’t seem like a huge blow in terms of how we think about the future of generative AI.
It’s interesting, especially for video, as there’s also a report on Seedance, the ByteDance generative AI model (for video), around this time. There are reports that[Cedance 2.0]has been delayed because of engineering and legal issues and basically the question of, “Can we build IP protection into this?” Apparently they never took it that seriously before.
And that’s this reality check moment. Hollywood insiders were making wildly exaggerated statements like, “It’s over, this is the future, all you have to do is fill in the prompts and make a feature film.” And it turns out that for all sorts of technical and legal reasons it is not so easy and we are very far from its realization.
Sean: And I think the last thing I should say on this is that this is one of many decisions that I think are happening since Fiji Simo came on board (and started running the day-to-day operations). This is just a big dynamic that has changed within OpenAI. And I think the further we get away from the moment when she was appointed to run the show, especially these consumer products, and decided its fate, the easier it is to look back on this moment and think about what a big moment it was for this company.
