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OpenAI Shuts Down Sora & United Wants More Premium Seating
00:27:51
Why OpenAI is shutting down Sora and United goes more luxury
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Good morning, Brew Daily Show. I'm Neal Freyman.
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And I'm Toby Howell.
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Today, United's giving you more ways to
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lie down on a flight then OpenAI's video generation platform. Sora is dead as a doornail. It's Wednesday, March 25th. Let's ride.
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B
Good morning. We got to tell you about this geography game that has completely taken over our office conversations and Slack channels. And it's called Map Tap. And each day you get five cities to locate on earth, from Tulsa to Hanoi. It has a sharing mechanism much like wordle and all those other games that end in L A. And yeah, it's just been a blast and we wanted to recommend it. If you want your workplace to devolve into madness the way ours is, Toby, you'll find out where Monaco is one day.
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C
The desire to beat Neil, or at least not lose embarrassingly to Neil, has me learning geography at a faster clip than at any point in school. I think the magic of the game is that you just get the landmass. There's no borders, there's no cities labeled, there's no rivers highlighted. It's just the world. And you realize how much you use other countries to approximate the location of other countries. It's been very fun. I recommend bringing it to your group chats. You can play it@maptap.gg, comment and email us your scores too. I want to see, you know, if Neil is actually playing at such a high level or if maybe there's some more geography nerds out there.
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And now a word from our sponsor, LinkedIn Ads. Toby, you are the best podcast coach co host I know.
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Oh, Neil, you're making me blush. I thought you were going to tell me I'm the best Map Tap player.
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You know you'll get there someday. Maybe. But do you know what else is the best LinkedIn ads is when it comes to generating the highest B2B ROAS of all online ad networks.
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They also have a network of over 1 billion professionals and 130 million decision makers.
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Spend $250 on your first campaign on LinkedIn ads and get a free $250 credit for one. Just go to LinkedIn.commbd that's LinkedIn.com MBD terms and conditions may apply. OpenAI's video generation platform came out of the gates soaring, but now it's no longer flying. Sora is officially dead the casualty of a strategic pivot towards business encoding tools for OpenAI ahead of its potential IPO. Sora launched too much hoopla back in September as sort of a TikTok style social feed for sharing AI content. You could input your own face into videos, which meant I was doing 360 dunks on Neil in no time. Sam Altman personally encouraged people to spice his face into videos, which led to a clip of him shoplifting becoming the first real viral content to come out of the platform. The move fast and break things approach meant that there were very few guardrails around protected content when Sora first launched, which set off a flurry of copyright battles. Eventually though, they got the mouse on their side with Disney inking a $1 billion deal which would let Sora use more than 200 of its characters, a deal that is now dead as bamboo his mom given Sora's closure, Neil I'd say for about two weeks or so. Sora was hot rocketing up the app store pumping out viral clips, but users didn't stick around and it turned into a money sucking black hole for the company that is already burning through cash at an alarming rate.
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You really have to stop spoiling movies. So it's a bad habit.
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C
She dies, Neil. She does.
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The main problem for Sora is that no one was using it and it was insanely expensive to operate. It did had it came out of the gate so fast it reached a million downloads faster than chat GPT. But then it had a huge plunge. People really weren't using the social media platform. By January, downloads were down 45%, according to TechCrunch. Meanwhile, video generation like this is so expensive, takes up so much compute for a company like OpenAI. Forbes estimated that OpenAI was perhaps blowing as much as $15 million per day and there was no way to make money off this particular consumer app. You didn't have to pay for it, there was no ads, it was just a money pit. And OpenAI decided to stream is. It's part of a broader strategic pivot that is trying to streamline all of these apps and go after more enterprise consumers than just regular people.
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I think people overreacted to Sora when it came out because I was as people are kind of eulogizing the platform, they're going back through what people's reactions were when it initially debuted. And Tyler Perry, you know, the Hollywood producer director, said he was so flabbergasted by it that he he canceled a $800 million studio expansion in this was a quote he gave to the Hollywood Reporter at the time. I'm going to paraphrase a little bit because it's rather long. I've been watching AI very closely and watching the advancements very closely. I was in the middle of what of planning for the last four years about an $800 million expansion at the studio. All of that is currently indefinitely on hold because of Sora. And what I'm seeing that is crazy when you consider the slop that Sora kind of started pumping out. But that really was the, you know, de facto consensus is like, AI Video Generation is here and it's going to remake everything. Hasn't quite panned out that way.
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No, but maybe, you know, there have been a bunch of other competitors jumping into the space. You know, there's that Chinese company, ByteDance, which is TikTok's owner, has its own video generation app that still appears to be going strong. Google's also in this space. So just because OpenAI is pulling back doesn't necessarily mean that AI video generation is completely dead. It just might be a cease fire. But for OpenAI, you know, it was trying to do everything everywhere all at once and it was not working. It needs to get its finances in order ahead of this ipo. It's going against Anthropic, which has no video at all. And they reached $19 billion in annualized revenue earlier this year just by doing text and code. OpenAI is looking like at that business model with a little jealousy and saying, we're trying to do all these things, trying to go after just regular consumers and it's not actually helping our business.
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It's a bit of an egg on the face moment too for Disney, because as Bob Iger is kind of culminating his tenure as CEO of Disney, he signed a deal where it was paying $1 billion to open AI, giving access to a lot of its character library. So that was like the last attempt at relevance for Sora. Let's bring in recognizable characters. Let's let Mickey Mouse, you know, dunk on Goofy. I don't know why everyone's dunking on everyone in my mind in Sora, but that now has a bunch of fallout attached to it. Josh d' Amaro is the new CEO of Disney. He has to clean up this billion dollar mistake. So it was just a fascinating angle on your face moment for two very large companies that eventually just sort of walked different ways because this deal is now dead.
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There's a lot of chaos in the aviation industry right now. But United is keeping its eye on the prize really rich travelers. Yesterday the airline announced its biggest fleet rejuvenation in history, adding more than 250 aircraft by 2028 that will be stuffed with premium lie flat seats that push regular economy passengers deeper to the back of the plane. Take the new A321 for example, what United's calling the Coastliner because it's going to whisk people between New York and California. This plane will have 20 elite tier Polaris seats which go horizontal, something that doesn't exist on that route now. In addition, There will be 12 premium economy seats, 36 with extra legroom and the rest standard economy. Essentially, United wants to give first class passengers the kind of white glove service they'd expect on an international flight on a longish domestic one, because United can charge a buttload for it. And that's all what this comes down to really. Airlines and the travel industry more broadly are going all in on premium because it's way more profitable than economy. United's main rival, Delta predicted that for the first time ever this year, premium revenue will overtake main cabin sales. In other words, airlines are way more focused on the people who turn left when boarding a plane than the ones who turn right. Toby I don't think there's a better visualization of the K shaped economy than a 2026 United airplane seating chart.
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United was just on one yesterday because they also announced something called the relax row yesterday, which is basically everybody's dream when you are flying. Economy is like, what if no one sat next to me and I could just lie down across all of these seats. They now have a configuration that you can transform three seats into a full on bed. They allow you to raise up the leg rest to a 90 degree angle so you get the entire, you know, surface of those three seats that you can lay down on. Apparently it's going to be great for families. They'll give you a custom fitted mattress pad if you book those seats. So they are throwing a bone, you know, back to the back of the of the plane. That bone comes with you know, very premium amenities like lie flat seats.
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I don't know how much that's going to cost. Right.
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They didn't release the prices on that but it's going to be quite.
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People are freaking out about it. And I just should add this is not the first airline to do something like this. Nippon in, in Japan has a similar mechanism for booking an entire road to lie down. And Air New Zealand has something called the sky couch which does something. Which does something. Air New Zealand is always a pioneer in this space because you have to fly really far to get anywhere or to New Zealand. But it does speak to I think just the overall amenities and push for premium that United and other airlines are going after. And it's, and it's for planes large and small, not just the big planes but also they, they debuted this regional jet, a CRJ450 which is like going from, you know, Tulsa to Denver. They're ripping out, they just currently this plane has 50 economy seats. So it's just you know, regular, regular seating. But now they're to put just 41 seats, 34 has economy and 77 first class seats. So they are just big and small. Doesn't matter the plane. They're just going all in on economy and just, they just want people to lie horizontally and pay them a buttload of money just to get on these planes.
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I think the price gap that really tells the story here is just looking at a single fare spread between the flight from Newark to San Francisco. If you fly standard coach, 423 bucks. If you fly the top tier Polaris class, $5556. So it is a massive golf here. I don't know who is paying that
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but you're paying it on the company's.
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Yeah, yeah, it's definitely business travelers but it just shows like if you were doing the math as a company executive you are earning, you know, so much more money from these premium seats. Of course you're going to put more of them in.
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Meanwhile that is coming on hot on Delta. In December. Delta CEO said United is doing their best to copy us and I don't blame them. I would copy Delta too if I was them. But. Right. Delta and United are completely separating themselves from the rest of the airline pack. American Airlines has has faltered in this poster push to premium while United, which I think had a pretty bad brand reputation for the past couple of years of the past decade has really rehabbed itself. And since we're talking about the airline industry, we should say any updates on the shutdown there really isn't any. Senate Republicans are offering this deal to Senate Democrats saying that perhaps we can fund all of Homeland Security, including tsa, besides immigration enforcement. So we'll see. It looks like they're coming a little bit closer to the deal, but but TSA lines are still long at various airports around the country.
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I have a flight tomorrow morning out of LaGuardia, so I've been on Reddit and just literally combing through like, what are the lines looking like? One of the lines looking like. I think the issue is people are showing up four and a half hours early to their flights, which just, you know, pushes all the lines forward. Hopefully things start to shake out. I just get lucky by tomorrow. Moving on. Think of the best drivers in the world. Maybe your mind goes to that friend who can nail a smooth parallel parking job, or even to the pros waiting for lights out at an F1 race. But the best drivers right now might be behind the wheel at CERN's campus near Geneva, Switzerland, taking antimatter out for a very, very delicate spin. The joyride went off without a hitch yesterday as scientists worked out the logistics of how to move the powerful and mysterious particles around antimatter. The oppositely charged version of normal matter often pops up as a boogeyman in the entertainment world. You might remember it Dan Brown's Angels and Demons, but it is a real thing. Modern models of the universe posit that equal amounts of matter and antimatter were created by the Big Bang. Should the two types of particles ever meet, it makes oil and water seem like the best of friends. The particles annihilate each other, releasing a massive burst of pure energy if they make contact. Which is why the test ride was a very Nervy 1 for CERN. Scientists suspended 92 antiprotons in a specially designed vacuum sealed cryogenic box that weighed nearly 2200 pounds. The box was carefully craned onto a truck while superconducting magnets kept the anti protons suspended in the middle of the chamber. So even if a driver popped the curb, the antimatter wouldn't go boom. Switzerland is still on the map last I check. So the test ended up being a success and opens the door to more research projects being conducted outside of CERN's antimatter facility. Neil, I've seen you whip around the Jersey Turnpike before, but I'm not sure I trust you with universe altering particles.
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I could do it, Toby. 10 and 2. 10 and 2. It's fine. You just keep it stable. If you if Ryan gosling saving Earth from mysterious space particles was Project Hail Mary. What would you call this? Maybe Project Screenplay. Got to protect your guy with the ball. Now my first question here was why do they need to move it? Like why do you need to move antimatter in the first place from cern? And it's actually fascinating. So cern, which is known for its big particle collider that, you know, they do a lot of experiments on, is actually an amazing antimatter factory. It allows you to make antimatter because what they do is you smash high energy protons against this metal target that creates secondary particles which go into a decelerator which are slowed down and then you go, then it filters into this trap where you can get antimatter. But what makes CERN so good at making antimatter also makes it a really bad place to do precise measurements on the antimatter because that decelerated creates a powerful field that makes it nearly impossible to perform very sensitive measurements. So what they need to do is get this antimatter to other labs across Europe. And the one they're trying to get to is in Dusseldorf, Germany, which maybe you can find on app tap now or maybe not, but it is eight hours away from Geneva from cern. So they, this is all, this test drive is all leading up to get this antimatter on an eight hour drive to Dusseldorf, Germany so they can actually perform precise measurements on it and actually learn a thing or two about antimatter.
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So the issue with that 500 mile drive is that you actually need 10 hours total because you need an hour on either side for loading and unloading the current format for how they're suspending the antimatter anti protons. It lasts about four hours. So you need to have a dedicated generator on board to make sure that, you know, you don't run out of power in the antimatter. Particles fall into the box. The biggest thing that they're trying to solve too is getting stuck in traffic. They can't, you know, forecast it's a long drive, you can't close down the entire roadway. So the biggest, you know, obstacle that they're trying to game plan for is what if, you know, a sheep crosses the road and we have a traffic jam to deal with. This won't be ready until 2029 at least. But the fact that they got it on four wheels, they got it driving. You mentioned 10 and 2. That guy has got to be or girl has to be white knuckling the steering wheel. I also maybe played up a little bit. What would happen if the antimatter protons made contact with real matter? It's not going to blow up the entire country of Switzerland, but you would lose the the proton anti protons themselves, which is very valuable. You're not going to lose half of the Swiss population though. All right, we're going to take a quick break and we're going to come back with a story about opening day right after this. Neil, I know you don't take investing seriously.
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You're right. I keep all my money inside my mattress.
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Don't be like Neil, whose door is almost always unlocked. Be like public.com users who take investing seriously. You can build a multi asset portfolio of stocks, bonds, options, crypto and more while accessing industry leading yields with a suite of fixed income products.
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And now with their new generated ass assets, you can turn any idea into an investable index with AI.
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Learn more at public.com Morning Brew and you can earn an uncapped 1% bonus when you transfer your portfolio. That's public.com Morning Brew paid for by Public Investing. Full Disclosure in Podcast Description this episode is brought to you by Apple Neil, there's nothing like your first Mac. I remember my first Mac like it was yesterday. I got mine right as my sister started to get recruited to play soccer in college. I was given the very important task of making her a highlight tape and Imovie was my best friend. She ended up playing at Georgetown, so I'd say it was all worth it.
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When I got my first Mac, I was heading into freshman year at the University of Maryland. A lot was uncertain that fall, but I knew I had a dependable sidekick for homework, connecting with other students and devouring blogs about our basketball recruiting class.
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That's how we felt with our first Macs. How will you check out the all new MacBook Neo, an amazing Mac at a surprising price.
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Learn more at apple.com/Mac that's apple.com Mac
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C
today I got an ad for goat feed and now I'm questioning everything. Is the algorithm telling me to start
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a farm that's broken ad targeting, throwing data at a wall, placing budget in the wrong place and giving the wrong audience an existential crisis in the process.
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C
With Twilio, you can stop guessing. Twilio lets businesses coordinate Smart promotions across SMS, RCS and WhatsApp to help reach the right people at the right time.
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Save your budget and reach the people who actually want to hear from you. Go to Twilio.com/daily show. That's tw I l I o.com/daily Show. The new Major League Baseball season begins tonight with the New York Yankees facing the San Francisco Giants. And with it brings another innovation to America's pastime, perhaps the biggest ever robot umps. Starting this season, players will be able to challenge ball and strike calls using an automated system of cameras placed around each ballpark park. When a batter, hitter or catcher disagrees with a human umpire's call, they'll tap their head to challenge it before a graphic is played on the jumbotron showing whether the ump got the call right or not. No one's going into this cold turkey. The ABC system, as it's called, has been tested in minor league games and throughout MLB spring training. Fans love it and players are cautiously optimistic it'll result in fairer play. Under commissioner Rob Manfred. The only thing constant about baseball is change. In an attempt to balance the sports hallowed traditions while still keeping up with the times, MLB has introduced a number of innovations in recent years to boost its popularity with modern fans, including a pitch clock to shorten marathon games. All signs point to these acts of self disruption being a huge success. The game is more popular than it has been in decades thanks to marketable superstars, a growing international audience and tweaks like the pitch clock that have dramatically improved the product. There's lots of optimism that this robot challenge system will only juice baseball's momentum.
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C
My biggest question is how do you define the strike zone? That's always been a question, you know, plaguing MLB for decades now. Now that you have to narrowly define it, you have to measure it. A two dimensional rectangle set to the middle of home plate with the edge of the zone set to the width of home plate. That makes sense. But then the top and bottom is adjusted based on each individual, individual players height. So that means you need very specific measurements of players height. And they brought in, you know, a third party, independent testers to finally figure out exactly how tall each player is because it matters to set the zone. So I feel like we're going to see a lot of, you know, six foots fall to five elevens while the shoes are off. And you know, it matters and I would imagine people are hunching their shoulders because you want a smaller strike zone. So I want to, I want to cross reference people's, you know, original stats when they entered the league and now that they have to be measured, maybe people are getting a little bit shorter.
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It's also going to, it's going to impact strategy in a big way. And we don't know yet, because the first game hasn't been played yet. But it'll be very interesting to watch who teams and managers let make challenges, because as I said, you can. It can be the catcher, it can be the batter or the pitcher. Well, in spring training and last year, we have data on who's actually good at challenging calls. Catchers were the best with a 56% overturn rate. Batters came in second place with 50%, and pitchers were in third place with 41%. So maybe if I'm a manager, I'm saying I'm not letting a pitcher make this challenge because I didn't mention you only have two challenges over the course of the entire game. If you get it right, you got to keep it. But you could lose them. So you don't want necessarily a pitcher who's just pissed off making a challenge tapping their head right away, because then you end up losing the challenge.
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One thing baseball purists are nervous about is, is it going to ruin the big moments of baseball? A couple of managers are like, my mind immediately went to game seven of the World Series. You know, bases loaded and strike three is called. But wait, there's a challenge. And all of a sudden the entire World Series ends on a head attack app. It just doesn't have the same sort of weight. But a lot of people who attended spring training games said it actually injected some nice tension into the product. When someone challenged a call, everyone sort of looked up from their phones, they looked at the jumbotron. They were a little bit more locked in. So I think it's just a different type of tension. And I think hopefully it's going to go over well. I've been to tennis matches where they used to have the Hawkeye system where the heartbeat would play and you would look if a call was in or out, out. I think it is a relatively good product. Maybe not something that baseball purists are going to love.
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B
Maybe the baseball. Start looking at what happened with tennis and have a little trepidation because, yes, there was an era in tennis where there was the challenge system, but now they. A lot of the majors have gotten rid of human refs completely. And so there will be a question moving forward, if this is successful, about what the future of human arms will actually be. But there's no question that all of the changes that Rob Manfred has made in baseball are paying dividends. Attendance was up for the third straight season, the first time. There's been three straight seasons of growing attendance since 2005-2007. And viewership is absolutely just crushing the NBA when it matters in the playoff moments. 2025 World Series Game 7 drew 26 million viewers. 2025's MLB Finals Game 7 drew 16 million viewers. That's the fourth time out of the last six years that the World Series has beat the NBA Finals in viewers. If you're looking at the MLB and the NBA, those two leagues are going in opposite directions. Let's sprint to the finish with some final headlines. Mark Zuckerberg is about to write a big check, even for him. Meadow was found liable for nearly $400 million after a new Mexico jury found the company didn't keep kids safe from child predators, sexually explicit content and human trafficking on its apps. New Mexico's attorney general who brought the suit, Raul Torres, said it was the first time that a state won in a trial against a major tech company for harming young people. Meta said it disagreed with the decision and would appeal. It's one of a number of cases Metta and other social media companies are facing this year over the lack of safeguards for children on their platforms, trials that legal experts have compared to the big tobacco reckoning in the 90s. A jury in Los Angeles has been deliberating since last Friday in a separate personal injury trial involving Metta and Google, while another federal trial will begin in Northern California later this year.
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C
Yeah, the way that this case started is fascinating. There was an undercover sting operation that shocked a lot of people in 2023. New Mexico investigators created decoy accounts on Facebook and Instagram posing as, you know, young users under the age of 14. And those accounts were sent explicit material. They were solicited for sex by multiple men. Two men were arrested as part of this thing operation and it sort of laid the entire groundwork for this case to be brought against Metta. You mentioned the dollar figure. The dollar figure is not large for a company of medicine is a 1 1/2 trillion dollar company. Me, this is a $375 million fine. But what matters is sort of the legal precedent that it sets as these other cases are, you know, on Meta's plate.
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Moving on. People aren't playing Fortnite as much and it's led to major layoffs at the games developer Epic Games. Yesterday Epic said it was cutting over 1,000 jobs, about 20% of its workforce, citing a tough macro environment but also decreased engagement on its flagship game. Fortnite CEO Tim Sweeney said the downturn in Fortnite means Epic was spending more money than it was bringing in in, hence the need to Cut costs quote. Despite Fortnite remaining one of the most successful games in the world, we've had challenges delivering consistent Fortnite magic with every season. Sweeney sounded optimistic about the future, but there's no denying that Fortnite's popularity and profitability has waned since people could hang out with each other again outside.
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C
And inflation is hitting the Fortnite economy to V Bucks, which is sort of the in game currency. The price of buying those went up recently. So it's almost like like virtual world denizens are facing the same railroad problems that normal people are where everything's getting more expensive in their game, which maybe makes it less fun to play. I think back again to Disney because Disney invested one and a half billion dollars in epic games because they had a pretty close tie up with the company. Their characters often appeared in Fortnite games. That bet is souring as well. So two bets, multibillion or multimillion dollars. Over $1 billion that Josh D' Amaro is inheriting from his predecessor that have gone south. Immediate him becoming CEO. Tough first month on the job, but
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B
they still have Bluey. And I'm just completely locked into this Mickey Bluey crossover.
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C
You don't even have kids. It's amazing that you know that it's happening. But yes, parents everywhere are for sure locked into that. Finally, Costco may have just taken down another company. Everyone's favorite big box store launched a new energy drink under its Kirkland Signature line that will run you 1699 for a 24 pack. Each drink contains 200 milligrams of caffeine. Metered eating. You're getting 282 milligrams of caffeine per dollar. Yes, I did that math. Math like that is giving competitor Celsius the shakes. Its stock fell around 7% yesterday as investors fear a new cheaper sheriff could be in town. Neal, that is a lot of bang for your buck. Is it time to switch over to the curtsiest?
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B
Yeah, if you care about milligram of caffeine poured per dollar then you'll definitely give it a look because each can of this Kirkland energy drink coffee costs $0.71 24 pack for 16.99. Let's compare that to Celsius at Walmart 12 packs are listed for just a buck more. 1798 at Target just maybe a dollar 50 more. 1859. So Kirkland is doing what Kirkland does. Just coming in with a strong product. Not a lot of marketing, not a lot of buzz. But when you're just looking for value. You're. You're saying maybe Celsius. The only reason I'm drinking it is because. Because it's in front of me at the grocery store. Meanwhile, I can go to Costco and save a ton of money using Kirkland's products. That is all the time we have. Thanks so much for starting your morning with us. Have a wonderful Wednesday. If you'd like to reach us, send an email to Morning Brew daily at Morning Broadcom or DM us on Instagram @MB. Daily show let's roll the credits. Emily Milian is our supervising producer. Raymond Lu is our senior producer. Our producer is Olivia Graham, and our associate producer is Olivia La Lake. Hair and makeup is passed out on a United flight. Devin Emery is our president, and our show is a production of Morning Brew.
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C
Great show, Daniel. Let's run it back tomorrow.