Disney in crisis: OpenAI shuts down Sora while the Epic metaverse stalls

Josh D'Amaro's first week as Disney's CEO has brought two crises at once. OpenAI is winding down its Sora image and video generation program, just months after Disney signed a billion-dollar deal to integrate it into Disney+. Meanwhile, the metaverse Disney was supposed to build with Epic Games has gone silent amid large-scale layoffs at the Fortnite studio.

In early 2025, Disney announced a $1 billion partnership with OpenAI. The idea looked ambitious: Sora's generative video and image technology was meant to fit naturally into the Disney+ ecosystem. It was pitched as a breakthrough: personalized content, interactive experiences and new formats for subscribers of the largest streaming service.

But almost immediately after the announcement, it became clear that Sora was unstable. Industry observers criticized the quality of its output and called the partnership an example of "AI slop": AI-produced content with no artistic value. Now OpenAI is shutting the program down altogether. There are no official explanations yet, but Disney is in an awkward position: the money is spent and the technology is gone.

Another story is unfolding in parallel. In February 2024, Disney struck a $1.5 billion deal with Epic Games, the creator of Fortnite. The goal was to build a metaverse on top of the Unreal Engine. The concept called for interactive worlds inside Fortnite: spaces based on Star Wars, Marvel and classic Disney cartoons. The announcement came with lofty rhetoric about "the next chapter in the history of entertainment."

But in April 2025, Epic Games announced layoffs of about 1,000 employees. It is not the company's first round of cuts: a year earlier, Epic parted ways with 16% of its staff. Teams that worked on ambitious non-game projects are now being cut, and Disney's metaverse has disappeared entirely from the public agenda. No joint announcements, no schedule updates, no roadmap. Just silence.

Disney does, of course, keep its options. Generative AI in Disney+ is entirely feasible with other technology partners or through in-house R&D units. The Epic metaverse has not been formally canceled, and the deal has not been terminated. But the media and investment context has changed dramatically: two of the company's key technology bets are in question at the same time.

It is a telling story about the risks of publicly announcing major technology investments before they materialize. $1 billion for Sora and $1.5 billion for the metaverse, $2.5 billion in total, are not just lines in a press release. For the new CEO, they are reputational commitments that now urgently need either an honest explanation or a reset.