Why OpenAI Shut Down Sora

Summary

WSJ Tech News Briefing – "Why OpenAI Shut Down Sora"

Date: March 31, 2026
Host: Julie Chang
Featured Guests: Nicole Lamoureaux (IBM Chief HR Officer), Berber Jin (WSJ Reporter)

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Episode Overview

This episode of the WSJ Tech News Briefing investigates two major trends at the intersection of AI and business:

1. How AI is reshaping workforce hiring and strategy, illustrated through a conversation with IBM’s Chief HR Officer, who explains why IBM is tripling entry-level hiring despite automation fears.
2. OpenAI’s abrupt shutdown of Sora, its highly-anticipated video generation app. WSJ’s Berber Jin provides a candid look at the business, technical, and industry shifts that led to this decision—and what it signals about AI's future.

The episode offers unique insights into how companies are recalibrating their investments and strategies amid an evolving and cutthroat AI landscape.

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1. AI and Entry-Level Hiring: IBM’s Contrarian Move

Guest: Nicole Lamoureaux, Chief Human Resources Officer, IBM
Segment: [01:27] – [05:04]
Interviewer: Chip Cutter, WSJ

Key Discussion Points

• Longer-term Vision vs. Short-term Productivity

  • Despite AI’s potential to automate up to 50% of company work, IBM is increasing entry-level hiring, bucking industry trends.
  • The crux: Should organizations focus simply on productivity or invest in human capital for sustainable growth?

• Mindset Shift: Productivity vs. Growth

  • Most companies are stuck in a “productivity mindset,” using AI to shrink the workforce or keep it flat.
  • IBM prioritizes a “growth mindset”—deploying human talent to new areas opened by AI, rather than just cutting costs.

• The Business Proposition

  • Entry-level hiring isn’t mere altruism. With a large part of the workforce set to retire or advance, fresh talent is essential to sustain innovation and fill future leadership roles.

Notable Quotes & Timestamps

• On AI Transforming Work Roles:

  • “AI is not free. It is costing the company money. So where do we want them directing that to get the biggest return? ... What if I told you three years from now 50% of the work done in your company could be done by AI, but that you had to keep your headcount flat? That’s the question we should be asking.”
    — Nicole Lamoureaux, [01:36]

• On Entry-Level Hiring Contradicting AI’s Efficiency Narrative:

  • “If you are in a productivity mindset of driving cost savings, generating profit, then you are going to say, I don't need this. It’s a logical decision in the short term. But I'd argue that there’s maybe a better decision definitely in the medium term… It will ensure that we are successful a few years from now.”
    — Nicole Lamoureaux, [03:37]

• The Long-Term Talent Challenge:

  • “What’s going to happen three, four, five years from now? Middle managers retire, leave, get promoted, move on—and you’ve got to fill that part of the organization.”
    — Nicole Lamoureaux, [04:38]

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2. Why OpenAI Shut Down Sora

Guest: Berber Jin, WSJ Reporter
Segment: [06:16] – [11:16]

Background

• Sora’s Hype:
  Launched in September, OpenAI’s Sora let users generate short videos from simple text prompts. It was widely anticipated to revolutionize creativity and entertainment—quickly reaching one million downloads and even securing a multiyear Disney deal.

• Unexpected Shutdown:
  Six months post-launch, OpenAI abruptly discontinued Sora, surprising the industry and signaling changing priorities.

Key Discussion Points

• Sam Altman’s Vision vs. Business Reality

  • Altman aimed for OpenAI to “reshape popular culture” and saw Sora as a creative breakthrough—akin to a ChatGPT moment for creativity ([07:05]).
  • Sora, however, became synonymous with “AI slop”—outputs perceived as lacking genuine creativity—and failed to spark the cultural movement Altman envisioned.

• The Revenue Imperative & IPO Pressures

  • As OpenAI readies for its IPO, the company must accelerate revenue growth.
  • The “fastest way to make money in AI right now” is through productivity tools for enterprise and developers—not entertainment or creativity apps ([08:07]).

• Competition and Resource Constraints

  • Rival Anthropic’s tools (“Claude Code” and “Cloud Cowork”) have taken the lead in coding and office automation, forcing OpenAI into a strategic pivot.
  • Sora consumed significant computational resources (“computationally intensive”), but generated little revenue compared to productivity tools.
  • OpenAI has launched a “super app” targeting business use, reallocating resources away from speculative, non-lucrative projects.

• Industry-Wide Shift: From Research to ROI

  • AI labs (OpenAI, Anthropic) started as research-driven outfits but are now ruthlessly focused on revenue—a trend accelerated by impending IPOs.
  • Investment is being redirected toward projects that produce a “specific return on investment,” often at the expense of research with broad or creative ambitions ([09:59]).
  • The demise of Sora “symbolizes the death of the more academic or research-first culture” at top AI labs.

Notable Quotes & Timestamps

• On Sora’s Original Purpose:

  • “He [Sam Altman] wanted OpenAI to have a social media app similar to Meta with Instagram, and he just wanted OpenAI to enter into popular culture… he really felt like this could have been almost like a ChatGPT moment for the creative space.”
    — Berber Jin, [07:12]

• On Financial Pressures Redefining AI Research:

  • “OpenAI is preparing to go public later this year. They need to grow their revenue very quickly… what really has taken off… are productivity tools for businesses and developers… OpenAI just decided they couldn’t really afford to keep Sora alive because they have to devote as many computing resources as possible towards winning that coding and enterprise business.”
    — Berber Jin, [08:07]

• On the Broader Industry Shift:

  • “The death of Sora symbolizes the death of the kind of more academic or research-first culture of these labs… [they] are focused on making money and the commercial aspects of AI over the more pure research aspects of it.”
    — Berber Jin, [10:38]

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3. Key Takeaways on the AI Industry’s Direction

• Both IBM’s hiring strategy and OpenAI’s Sora shutdown highlight a pivot in AI priorities—from experimentation and wide-ranging research to focused, revenue-driven investment.
• The IPO drive is quickly transforming leading AI labs from research-first to business-first, especially as they compete for enterprise customers.
• Creative uses of AI, such as video generation, are being deprioritized as companies chase more reliable and lucrative business models (coding, automation, productivity tools).
• The current wave of AI advancement is as much about organizational strategy, market survival, and resource allocation as it is about technology itself.

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4. Memorable Moments

• IBM Going Against the Grain:

  “We are tripling entry level hiring in an era where so many people are pulling back completely doing zero... There's a business proposition when you think about deploying this talent to the growth areas and new areas of business.”
  — Nicole Lamoureaux, [02:49]

• AI Labs Letting Go of 'Grand Visions':

  “It’ll be interesting to see what else they choose to cut and if there are any other signs that Sam Altman’s sort of grand vision for the company is getting a pretty harsh reality check.”
  — Berber Jin, [11:10]

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5. Timestamps for Important Segments

| Timestamp | Segment Description | |-------------|------------------------------------------------------| | 01:27–05:04 | IBM’s Nicole Lamoureaux on AI and entry-level hiring | | 06:16–11:16 | Analysis and fallout of OpenAI shutting down Sora | | 07:05–07:59 | Sora's launch and original vision | | 08:07–09:53 | Financial/strategic rationale for Sora’s shutdown | | 09:59–10:50 | Broader implications for AI research culture |

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Summary prepared for listeners and readers seeking an in-depth, structured understanding of the episode’s key themes and discussions.

Transcript

[Host/Interviewer]

AI's growth is taking it from centralized systems into everyday workflows, and the enterprise endpoint is taking on a new role and new risks. At the break, AMD's Magda Petwarden will discuss how enterprises are rethinking security to protect Today's AI enabled PCs.

[Julie Chang]

Welcome to Tech News briefing. It's Tuesday, March 31st. I'm Julie Chang for the Wall Street Journal. While AI has some companies reducing their entry level workforce, IBM announced it plans to trip hiring at that level in the US this year. Their HR chief explains the move, one she says prioritizes growth over productivity. Then OpenAI's decision last week to shut down its video generation app Sora came as a shock to most. We dive into why the company decided to scrap its most hyped product since ChatGPT, and what it tells us about where the industry is headed. First up last week at the WSJ Leadership Institute's Chief People Officer Summit in Menlo Park, California, the WSJ's Chip Cutter spoke with Nicole Lamoureaux, IBM's Chief Human Resources officer, to discuss how AI is revolutionizing productivity for many companies and changing the way many approach hiring for entry level work. But Lamoro says it's key to look beyond the short term. Here's a selection of their conversation.

[Host/Interviewer]

What do you think when you think about sort of how AI changes jobs right now? Maybe some roles can just go away entirely. There will be new ones created too. But how do you think about that debate?

[Nicole Lamoureaux]

So a couple things we need to remember. AI is not free. It is costing the company money. So where do we want them directing that to get the biggest return? The AI is pretty amazing. Whether it's agentic or generative or automation, it's pretty amazing. And it can do a lot of work. A lot of work that exists in your companies today that you're not even thinking about it can do. And so what if I told you three years from now 50% of the work done in your company could be done by AI, but that you had to keep your headcount flat? That's the question we should be asking our leadership teams.

[Host/Interviewer]

Is that how you're thinking about it?

[Nicole Lamoureaux]

Absolutely. What new products would you build? What new clients would you go after? This idea of AI just driving efficiency and productivity and cost savings? Look, it does. But our CEO has also been clear it's not just saving straight to the bottom line. It's how are you going to reinvest? Are you having this idea of moving from AI to productivity to AI to Growth.

[Host/Interviewer]

So if you had a guess three years from now, will IBM be the same size it is right now? Will it have fewer people, more people? What does that look like?

[Nicole Lamoureaux]

It's hard to, to crystal ball more. And many saw the announcement that we made that we are tripling entry level hiring in an era where so many people are pulling back completely doing zero, or where they're shaving it a little bit half as they're figuring this out. But this idea of hey, we want to start thinking about talent, human talent, about where are we going to go deploy that to drive growth, that is what we've got to think about.

[Host/Interviewer]

I'm so intrigued by that entry level hiring call. It got a lot of attention. What's the business case for that? And if it is such a smart move to bring in more entry level people right now, why are so few companies doing that?

[Nicole Lamoureaux]

It's because they're in this productivity mindset versus the growth mindset. So I will acknowledge if I look at our entry level hiring of, you know, and the jobs that we had two years ago, AI can do almost all of it. So I acknowledge it's a very logical discussion. If you are in a productivity mindset of driving cost savings, generating profit, then you are going to say I don't need this. It's a logical decision in the short term. But I'd argue that there's maybe a better decision definitely in the medium term. What do you drive to? How can your software developers, rather than maintain products, given they know code, can you put them on squads where they're actually developing and interacting with clients about new products, new features? It's a growth mentality. But I also think that it will ensure that we are successful a few years from now. Because what's going to happen three, four, five years from now, Middle managers retire, leave, get promoted, move on and you've got to fill that part of the organization. So to me this is a business proposition. This is not just a benevolent good for society. Bring in entry level hires. There's a business proposition when you think about deploying this talent to the growth areas and new areas of business. But it also then helps in your longer term talent strategy.

[Julie Chang]

That was WSJ reporter Chip Cutter speaking with IBM's Chief Human Resources Officer Nicola Moreau at the WSJ Leadership Institute's Chief People Officer Summit. You can find the full chat linked in the show notes. How do you think AI is changing entry level work? If you're a listener on Spotify, leave us a comment with your thoughts coming up. OpenAI's video generation app Sora was supposed to make a big splash in pop culture and entertainment. Instead, it got scrapped like last week. We'll explain why after the break.

[Host/Interviewer]

AI PCs are increasingly where sensitive data is acted on in real time. How should enterprise security leaders address that? Here's Magna Petwarden, corporate Vice president of Product Management Client business unit at AMD, with some thoughts.

[Magda Petwarden]

People are going to use AIPCs, and enterprises have to think about AIPCs as a natural extension of their zero trust policies. They have to embrace this idea of security that is distributed versus centralized with sort of a moat built around it, because there are no more moats.

[Julie Chang]

Last September, OpenAI's video generation app Sora shot to the top of the Apple Store the week of its launch. In just a few minutes, users could create a short video of whatever they typed as a prompt. The app quickly hit 1 million downloads, and at the end of last year, it announced a multi year licensing partnership with Disney. But last week, just six months later, OpenAI pulled the plug. WSJ reporter Berber Jin spoke with people familiar with the matter for an exclusive look behind the scenes of that decision, and he's with me now to discuss how it all shook out. And a quick note before we jump in. News Corp, owner of the Wall Street Journal, has a content licensing partnership with OpenAI. So Berber, what was OpenAI CEO Sam Altman's vision with Sora?

[Berber Jin]

He's always envisioned AI to be more than a basic chatbot or a productivity tool that can do scheduling tasks for you and build a PowerPoint. He always had a vision of AI reshaping popular culture, reshaping entertainment, and Sora very much fit into that vision. He wanted OpenAI to have a social media app similar to Meta with Instagram, and he just wanted OpenAI to enter into popular culture. And with Sora, he had this vision of enabling the creativity of its users. So a lot of people would probably say Sora is the opposite of that. People don't create their own art, they just outsource it to AI. And obviously Sora is very tied with this idea of AI slop. But I think in Sam's mind, he really felt like this could have been almost like a ChatGPT moment for the creative space.

[Julie Chang]

Okay, so that ChatGPT moment never really came to be. How did OpenAI arrive at the decision to shut down Sora?

[Berber Jin]

OpenAI is a very different company today than it was six months ago when they released Sora. OpenAI is preparing to go public later this year. They need to grow their revenue very quickly. And what's happened in the past few months is that it's become very clear that the easiest and fastest way to make money in AI right now is to sell these so called productivity tools to businesses and to developers. So the thing that really has taken off in the past few months is Claude Code, which, which was released by Anthropic. It's kind of the tool of choice for software engineers. And Anthropic also released Cloud Cowork, which is a work productivity tool for AI. So these are more boring tools, right? Like they are designed to help you code, to help you outsource the more monotonous back office tasks. But businesses are willing to pay a lot of money right now for those tools. And Anthropic has really just been ahead of OpenAI. And so OpenAI is kind of in the middle of this really big strategy shift to focus on deploying as many resources and specifically their computing resources towards catching up in building these productivity tools. So earlier this month they announced a new kind of super app which they hope will be this AI assistant on steroids for businesses. And what happened was that SORA really just, it no longer made sense within the kind of strategic roadmap of OpenAI, right, because it wasn't generating much money and it was incredibly computationally intensive. And so OpenAI just decided that they couldn't really afford to keep SORA alive because they're in this precarious moment where they have to devote as many computing resources as possible towards winning that coding and enterprise business.

[Julie Chang]

What does pulling the plug on Sora tell us more broadly about where the industry is heading?

[Berber Jin]

So the thing that's really interesting with these labs is that they all started off as research labs, like kind of funding big, bold, ambitious research projects and they weren't super concerned with revenue. But now with OpenAI and Anthropic both trying to IPO by the end of this year, that research culture has gone away because now the executives at those companies are just looking at research that will produce a very specific return on investment. So in the current environment, what that means is basically funding research that makes AI better at coding and makes AI better at completing productivity related tasks. It definitely isn't funding research into video generation. The death of Sora also symbolizes the death of the kind of more academic or research first culture of these labs and encapsulates how they very much are focused on making money and the commercial aspects of AI over the more pure research aspects of it. As OpenAI interest towards an IPO. It'll be interesting to see what else they choose to cut and if there are any other signs that Sam Altman's sort of grand vision for the company is getting a pretty harsh reality check.

[Julie Chang]

That was WSJ reporter Berber Jen and that's it for Tech News Briefing. If you're a listener on Spotify, don't forget to leave us a comment. Today's show was produced by me, Julie Chang, with supervising producer Katie Ferguson. We'll be back later this morning with your TNB Tech Minute. Thanks for listening.

[Host/Interviewer]

How can enterprise security leaders protect AI PCs? Here again is AMD's Magna Pet Warden.

[Magda Petwarden]

You have to think about security as foundational and not something that comes after the fact. That and that has to be anchored in hardware. Hardware protecting software is more superior from a security strategy perspective and creates sort of an immutable trust even before the operating system drivers and AI models ever load. These protections really create the root of trust for AI enabled workloads so that they can confidently run. And as AI moves onto the device, then the more sensitive data and decision making shifts to closer to the hardware and that means that software only is no longer sufficient.

[Host/Interviewer]

Learn more about how AMD Protects AI PCs from Silicon to [e-mail] this content

[Nicole Lamoureaux]

was created by Custom Content from WSJ,

[Julie Chang]

a unit of the Wall Street Journal advertising department.