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Welcome to the Tech Brew Ride home for Wednesday, March 25, 2026. I'm Brian McCullough. Today OpenAI is abandoning Sora to do the big refocus they've been signaling. Meta is starting to rack up the losses in court. Is China going to block the Manus acquisition by Meta from going through? They've not even let the founders leave the country. And interesting raises from vertical AI startups. Here's what you missed today in the world of tech. OpenAI announced it is discontinuing products that use its Sora models, including the consumer app Sora, a Sora version for developers and a video feature inside of ChatGPT, quoting the Journal, the move is one of a number of steps OpenAI is taking to refocus on business and coding functions ahead of a potential initial public offering as soon as the fourth quarter of this year. CEO Sam Altman announced the changes to staff on Tuesday, writing that the company would wind down products that use its video models in addition to the consumer app, OpenAI is also discontinuing a version of Sora for developers and won't support video functionality inside ChatGPT either. OpenAI is in the middle of a strategy shift to redirect the company's computing resources and top talent toward a so called productivity tool that can be used by both enterprises and individual users. Last week, OpenAI announced that it was combining its ChatGPT desktop app, coding tool, codecs and browser into one super app. The company expects the consolidated product to align its employees around a single vision. OpenAI launched Sora last September, aiming to expand its dominance among consumers by creating a TikTok style social feed that allowed users to share AI generated content with one another. Shortly after the launch, Sam Altman encouraged users to find different ways to splice him into famous or iconic scenes from popular culture. At the time, some OpenAI employees were surprised by the amount of computing resources the company poured into the project, given the lack of clear evidence of demand for such a product. But Altman wanted the company to think ambitiously about its product roadmap and unveiled plans for a new AI hardware device that the company plans to launch in the coming years. The Sora discontinuation is a rebuke to OpenAI's previous strategy, which involved an array of product launches that created a complicated organizational structure and competing priorities. OpenAI launched Sora without guardrails to protect certain content from being used without the consent of copyright holders, touching off a brief copyright battle. Eventually, the company added controls so content owners could block the use of their likenesses or intellectual property. In December, Disney said it would invest $1 billion in OpenAI. As part of the deal, OpenAI was set to license more than 200 characters from Disney, allowing users to create and share AI generated videos with beloved Disney characters. The three year agreement allowed people to wield a lightsaber like Luke Skywalker or insert themselves into Toy Story. Disney's investment into OpenAI isn't proceeding. As the nascent AI field advances rapidly, we expect OpenAI's decision to exit the video generation business and to shift its priorities elsewhere, a Disney spokeswoman said. Yes, that licensing agreement with Disney is ending, so no more thoughts of making Moana videos for you, your kids. Also, this is quoting Reuters. On Monday evening, Walt Disney teams were working together on a project linked to Sora, OpenAI's AI video tool. But just 30 minutes after that meeting, the Disney team was blindsided with word that OpenAI was dropping the tool altogether, a person familiar with the matter said. It was a big rug pull, according to the person who requested anonymity to discuss the matter. The transaction between the companies has actually never closed to other people familiar with the matter said. And no money ever changed hands. OpenAI executives have been debating Sora's fate for some time. Running the AI video app required significant computational resources, a fourth person with knowledge of the matter said, and left other teams with less firepower. Even so, some OpenAI staffers on the Sora team were surprised when they were informed of the changes Tuesday morning, one of the people and another source said. The announcement was made just a day after OpenAI published a blog post about Soros safety standards. A spokesperson for Disney said that the media giant respects OpenAI's decision to exit the video generation business and to shift its priorities elsewhere. The two sides are discussing if there is another way they can partner or invest with one another. One of the people familiar with the matter said. But back to that memo from Sam Altman announcing all of this. He also said OpenAI's next model is finished pre training and is moving on to safety and research and security for scaling. And if you're curious about some of the basic rationale behind pulling back from Sora, quoting Alex Heath's newsletter, while the outside world speculates about motivations, the reality is that OpenAI is making trade offs in how it allocates compute across research, product launches and inference. Video generation is extraordinarily GPU intensive and every chip powering Sora Eclipse was one not powering what OpenAI is focusing on right now. Codex and its enterprise products. OpenAI employees are under tremendous pressure to catch up with Anthropic on coding around productizing it in a way that successful to non engineers like Claude Cowork has done. The broader picture is OpenAI's new super app strategy, ChatGPT. Codex and the Atlas browser are being merged into a single desktop application to better compete with what Anthropic is cooking and enable agents at scale. It's hard to see how Sora fits into that strategy, especially when OpenAI has already hit many brick walls and pursuing potential content deals for it. Simply put, the GPUs are better used elsewhere. Sam Altman also laid out a reorg today. He's moving safety under Mark Chen's Research Org and security under Greg Brockman's Scaling Org, freeing himself up to focus more on fundraising and building data centers. Fiji Simo is now the CEO of AGI deployment or essentially everything else. Altman said OpenAI has finished pre training its next model, codenamed Spud, which he expects to produce a quote, very strong model in a few weeks that the team believes can really accelerate the economy, end quote. These are starting to come thick and fast. A New Mexico jury has found Meta violated that state's Unfair Practices act by not safeguarding its apps from child predators. Meta must pay $375 million in civil damages Quoting CNBC the civil trial, which began with opening arguments in Santa Fe last month, centered on allegations that Meta violated state consumer protection laws and misled residents about the safety of apps like Facebook and Instagram. New Mexico Attorney General Raul Torres sued meta in 2023 following an undercover operation involving the creation of a fake social media profile of a 13 year old girl that he previously told CNBC, quote, was simply inundated with images and targeted solicitations from child abusers. Deliberations began Monday and jurors were tasked with ruling in favor or against the defendant. Meta jury members found that Meta willfully violated the state's Unfair Practices act and decided the company should pay $375 million in damages based on the number of violations. Linda Singer, an attorney representing New Mexico, urged jury members during closing statements to impose a civil penalty against Meta that could top $2 billion. We respectfully disagree with the verdict and will appeal, a Meta spokesperson said. We work hard to keep people safe on our platforms and are clear about the challenges of identifying and removing bad actors or harmful content. We will continue to defend ourselves vigorously and we remain confident in our record of protecting teens online. Meta denied the State of New Mexico's allegations and previously said it is focused on demonstrating our long standing commitment to supporting young people. The jury's verdict is a historic victory for every child and family who has paid the price for Meta's choice to put profits over kids safety, torres said in his statement. Meta executives knew their products harmed children, disregarded warnings from their own employees and lied to the public about what they knew. Today, the jury joined families, educators and child safety experts in saying enough is enough. When the New Mexico trial's second phase, conducted without a jury, commences on May 4, a judge will determine whether Meta created a public nuisance and should fund public programs intended to address the alleged harms. The state's lawyers are also urging Meta to implement changes to its apps and operations, including enacting effective age verification, removing predators from the platform and protecting minors from encrypted communications that shield bad actors. During the trial, New Mexico prosecutors revealed legal filings detailing internal messages from Meta employees discussing how CEO Mark Zuckerberg's 2019 announcement to make Facebook messenger end to end. Encrypted by default would impact the ability to disclose to law enforcement some seven and a half million child sexual abuse material reports, end quote.