Sora’s exit could be a reality check moment for AI videos.

OpenAI announced this week that it was shutting down its Sora app and its associated video model six months after the app launched.

In 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 at large. To some extent, this move appears to be consistent with what we’ve been 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 sign of the maturity we see in AI labs.”

But Sora’s closure, along with ByteDance’s reported delay in launching its Seedance 2.0 video model globally, may be a reality check moment for AI video tool makers and evangelists who claim 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 apps. I mean, this app wasn’t particularly appealing, at least to me, and I think it might be to others as well. Because it was the idea of ​​a social network that had no people and was just bullshit.

But beyond apps, OpenAI seems to scale down basically everything you do with video. According to the Wall Street Journal, which reported some of this news, it’s about the idea that Open AI is actually trying to focus on business products, enterprise products, and programming products before they potentially go public. (So) these consumer social apps, (and) video more broadly, are not a priority right now.

Sean: Yeah, I’ve never actually used (the app). The idea disappointed me for several reasons. You know, this was a good reminder that Open AI isn’t trying to take them down in any way. But perhaps internally, I think this was a reminder of the luck(…) element of how ChatGPT became successful.

There is certainly something of value there for people. I don’t want to take that away. Because we can’t reach the usage numbers we report without it working properly. And even more so because it can be maintained over the years and developed into something meaningful to people.

But when Sora came out, there was this element of, “We’ve created the most successful consumer product of all time, and now we’re building it again. And we’re bringing it all to Disney.” I think it’s a really harsh reminder that this isn’t always an absolute shortcut to the top of the best consumer products and that people really need something to make them feel like they’re getting some sense out of it.

Kirsten: Yes, I would actually like to provide OpenAI support for this decision. Because sometimes we laugh at the whole idea of ​​“moving fast and breaking things.” But I think there’s value in companies that iterate very quickly and then get rid of products that don’t work and not feel a sense of failure afterward. What I mean is, there was real money that was lost. If you look at the deal with Disney, it was a billion dollar deal. But since I can’t see the balance sheet, I can’t have any insight into this, but how much have they spent on this and what is the long-term value of the company?

Of course, it was interesting to see what they could create, but their decision to close it showed signs of the maturity seen in AI labs.

Anthony: In terms of what it means for OpenAI, this seems very consistent with everything we’ve heard about the strategy going forward. I don’t think it’s a huge blow or anything like that in terms of how we think about the future of generative AI.

In particular, in the case of video, it is interesting to see reports about Seedance, a ByteDance generated AI model (for video). There are reports that (Seedance 2.0) has been delayed because of engineering and legal issues and basically the question: “Can we build IP protection into this?” Apparently they didn’t take it so seriously before.

This is the moment of reality check. Even people in Hollywood are really exaggerating things like, “We’re done. This is the future. All we have to do is type in the prompt and make a feature film.” And it turns out that, for all kinds of technical and legal reasons, it’s not that easy and we’re very far from that happening.

Sean: And the last thing we have to say about this is that this is one of the numerous decisions that appear to be taking place after Fidji Simo started running its day-to-day operations. This is a huge dynamic that has changed within OpenAI. And I think the further she gets from the show, especially from that moment where she was tapped to run these consumer products and decide their fate, the easier it will be to look back on this moment and think what a huge moment it was for this company.