Disney Cancels $1B OpenAI Partnership as Sora App Shutters

Disney has canceled its planned $1 billion licensing partnership with OpenAI following the AI company's announcement to shutter its Sora video-generating app, according to multiple media reports.

"As the nascent AI field advances rapidly, we respect OpenAI's decision to exit the video generation business and to shift its priorities elsewhere," Disney said in a statement. "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 blockbuster three-year licensing deal, announced in December 2025, would have made over 200 Disney-owned characters available for use in Sora-generated videos. At the same time, Disney said it would be making a $1 billion equity investment in the AI company.

However, with OpenAI's decision to shut down Sora just 15 months after its launch, the partnership has now been scrapped. This also means the end of Disney's planned $1 billion investment in the AI firm.

The Sora app was intended to allow users to generate custom videos using a library of Disney characters and assets. But the venture appears to have fallen short of expectations, leading OpenAI to pivot away from the video generation business entirely.

Despite the termination of this specific partnership, Disney said it will continue to "engage with AI platforms to find new ways to meet fans where they are while responsibly embracing new technologies." The media giant remains interested in exploring the potential of artificial intelligence to enhance its content and fan experiences, albeit with a more cautious approach.

The abrupt end of the Disney-OpenAI collaboration highlights the rapidly evolving landscape of the AI industry, where even well-funded and high-profile initiatives can falter as priorities and technologies shift. As both companies navigate this dynamic space, they will likely seek out new opportunities for partnership and innovation that align with their strategic objectives and respect the rights of creators and intellectual property holders.

The cancellation of the Disney-OpenAI deal serves as a reminder of the challenges and uncertainties inherent in the fast-paced world of artificial intelligence and its integration with the entertainment industry. As the technology continues to advance, both companies will need to carefully navigate the evolving landscape to find mutually beneficial and responsible ways to leverage AI for the benefit of their audiences and stakeholders.