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Sora is nomora. Motley fool money starts now. Welcome to Motley Fool Money. I'm Travis Hoy. I'm joined today by Lou Wightman and Rachel Warren. And guys, the OpenAI news continues to come out. Lou, we talked about this a little bit yesterday with Tyler Crowe on the show, but the breaking news yesterday was that they are shutting down Sora, this sort of social media video app that they launched not too long ago, a few months ago. But not only that, they're actually shutting down, making their own video models. Rachel, this seems like a huge shift for OpenAI. They're really focusing on kind of the enterprise side coding, you know, their Codex product. We've talked about that. It was so striking that they have put so much time and energy, even a billion dollar deal with Disney, to try to build up this video business. One of those spaghetti at the wall kind of things. And now they're just saying, you know what, we're done with that.
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Yeah, I mean, there was a lot of viral buzz around Sora, but there had also been kind of some major challenges. So Sora had this ability to generate lifelike videos. I mean, it was generating unauthorized clips of people like Michael Jackson and Martin Luther King Jr. So there was fierce opposition from actors, unions, family estates. There was even an issue they were having with the Japanese government demanding that OpenAI stop using copyrighted anime and manga characters in Sora V2. The other point I think to make here is very high computational costs required to run these models. Very much putting a dent, I think, in the bigger dream of OpenAI for profitability ahead of its reported IPO potentially later this year. I think they're really refocusing on their upcoming SPUD model. Their AI agents, Right, designed for coding and robotics. I think they're really trying to kind of cut their losses and reallocate their resources towards autonomous AI agents, enterprise grade tools. It is interesting, the impact on Disney. I mean, they had this three year, billion dollar partnership that included licensing over 200 characters for Marvel, Pixar and Star Wars. That deal's dead. You know, Disney publicly said they respect OpenAI's decision, but there was some reports that the news caught the company off guard, that maybe they didn't even hear about it until about 30 minutes after a joint meeting. So a lot going on there. I mean, for Disney's part, they're now an active free agent in the AI space. You know, they're reportedly engaging with other AI platforms to find a new partner. So that could be something interesting to see. I think now, with this kind of leader out of the race, a lot of eyes are turning to Alphabet and Anthropic. You know, Anthropic has notably chosen to avoid video generators entirely. So maybe this is something that we're not going to see as much investment in in the space. That remains to be seen. But it is a big shift for OpenAI from, I think, where a lot of people thought the business was going.
