• by Wayne Friedman , Staff Writer, 9 hours ago

Bad business economics, lack of strong consumer interest and users generating controversial video content are some of the reasons analysts believe OpenAI -- and its deal with Disney -- abruptly was ended this week.

Although OpenAI was telling the marketplace, and Disney, that Sora -- a video-generation platform that consumers could use --  had lots of safeguards, insiders say consumers were continuing to make short videos using controversial celebrity and other protected IP content.

For some time now, the Hollywood creative community has been concerned about Sora because of ever-growing copyright infringement issues. Writers, actors, and those who own other intellectual property were up in arms about Sora.

This all happened as OpenAI was prepping ChatGPT, its other rising business, for expansion to include advertising -- driven by strong user numbers by consumers, with 900 million global weekly average users.

In addition, analysts believe OpenAI has been looking to dramatically pare down any big money-losing future growth businesses -- with huge capital expenditures in preparation for its public stock market offering later this year.

Sora -- with its rapidly rising need for expensive compute power -- was an obvious target.

In bad news for Disney, reports suggest the big legacy media/entertainment company was caught off guard by the sudden OpenAI move, only getting about 30 minutes' notice before OpenAI issued a release about the move.

Where are things headed now for OpenAI? Some believe business-to-business robotics is the answer for what remains of its video-generation business -- helping robotic devices analyze physical space and motion.

The idea is to move away from iffy "TikTok"-like videos which could result in possible legal challenges from the Hollywood creative community and even establishing legacy media/entertainment companies that feel their IP is being threatened.

Still one wonders if Disney, at its core, idealized OpenAI (with a $1 billion investment in the company) and Sora in the best possible way.

Could it find life with another company in the future -- one that allows Disney fans and consumers to play with Disney content and characters in a video setting with all creative protections in place for originators of the characters and content?

No doubt Disney was hoping the Sora deal would forge a foundation to establish a new business, a new video media platform -- but one that marketing and advertising brands could support.