The Walt Disney Co. is backing out of a reported $1 billion investment deal with OpenAI that would have licensed more than 200 of its characters for use in the AI text-to-video app Sora, according to The Hollywood Reporter.
Sora, which initially launched in December 2024 and generates realistic animated videos from written prompts, is now shutting down. The closure was announced in a post on X on Tuesday, March 24, 2026.
“We’re saying goodbye to Sora. To everyone who created with Sora, shared it, and built community around it: thank you,” the company said on X. “What you made with Sora mattered, and we know this news is disappointing. We’ll share more soon, including timelines for the app and API and details on preserving your work.”
Led by CEO Sam Altman, OpenAI’s Sora offered free use of known intellectual property and actors since its launch, per The Hollywood Reporter. The platform quickly moved to give studios and talent greater control over their intellectual property and likenesses, allowing for their approved use in AI-generated content.
Inside The OpenAI-Disney Licensing Deal
As AFROTECH™ previously shared, Disney’s reported $1 billion equity investment in OpenAI was part of a three-year licensing deal aimed at advancing human-centered AI and responsible storytelling. The agreement would have brought Disney characters into Sora, with both companies committing to protecting user safety and creator rights.
As part of the deal, Disney would have become the first major content licensing partner on Sora and an OpenAI customer, using its APIs to develop new tools, products, and experiences, including enhancements for Disney+. The company also planned to deploy ChatGPT internally for employees.
The partnership would have enabled Sora to generate short, user-prompted social videos featuring over 200 characters from Disney, Marvel, Pixar, and Star Wars, along with recognizable costumes, props, vehicles, and environments, according to a news release. OpenAI’s image-generation tools would have also allowed users to create visuals from simple text prompts within seconds.
“As the nascent AI field advances rapidly, we respect OpenAI’s decision to exit the video generation business and to shift its priorities elsewhere,” a Disney spokesperson said, per The Hollywood Reporter. “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.”
