OpenAI’s financial situation raises eyebrows, as it reportedly spends over $5 billion annually to power its Sora video app, which recently celebrated 4 million downloads. Despite this impressive user engagement, OpenAI is losing close to $15 million daily on video generation. Sora’s costs are steep due to the complexity of video models compared to text-based models like GPT-5, estimated at $1.3 per 10-second video.
OpenAI is banking on leveraging user-generated content for market share, hoping to monetize the app in the future as it improves its operational efficiency. Analysts note that the demand for video generation could decrease costs significantly over time. However, CEO Sam Altman has indicated that current ad models are insufficient to cover costs, foreshadowing potential changes in access to Sora. The company’s aggressive strategy may set the stage for future profitability, but immediate losses raise concerns about sustainability.
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