OpenAI Reveals "AI Bubble Is Bursting": Sora Halted, Disney Withdraws $1 Billion, Pentagon Controversy, Single Quarter Loss of $11.5 Billion

OpenAI has faced product shutdowns, partnership failures, ethical controversies, and financial crises all within a few weeks—Sora ceases operations, Disney’s $1 billion investment plan falls through, Pentagon contracts trigger user departures, and Q4 2025 losses reach $11.5 billion. These multiple crises have sparked widespread doubts about whether the “AI bubble is bursting.” This article is based on tweets from @TheBTCTherapist and various sources, translated and compiled by Dongqu Dongqu.
(Background: Satirical article: “After writing 22 slides full of AI, I tricked $4 million in investments”)
(Additional context: Trump announces “National AI Legislative Framework” to push for a unified federal regulation, fiercely protecting US AI dominance)

Table of Contents

Toggle

• Sora survives only 6 months, Disney withdraws simultaneously
• Pentagon contract triggers user exodus, executives resign in protest
• Quarterly loss of $11.5 billion, unlikely to turn profitable before 2030
• “The bubble is bursting”: Bitcoin community’s counterargument

Originally, OpenAI was set to benefit the most from the 2026 AI boom, but in just a few weeks, it has suffered a series of setbacks: flagship video generation platform Sora announced shutdown, Disney’s $1 billion investment deal fell apart, Pentagon contracts caused massive user departures, coupled with ongoing financial deterioration, all culminating in a crisis in March.

Sora survives only 6 months, Disney withdraws simultaneously

On March 24, 2026, OpenAI officially announced the shutdown of the Sora AI video generation platform. Launched at the end of 2024, Sora had only been operational for about six months.

The closure of Sora was not unexpected. App Store data shows that in December 2025, US downloads dropped 32%, and in January 2026, another 45%—a nearly 80% decline over two months, with user loss at an unusually high rate.

Closely tied to Sora’s fate was Disney’s long-promised $1 billion investment plan, which never materialized. In December 2025, rumors circulated that Disney would invest $1 billion in OpenAI, with plans to license over 200 characters from Disney, Marvel, Pixar, Star Wars, and more for Sora. Now that Sora is shutting down, that deal remains unfulfilled.

Disney issued a statement: “We respect OpenAI’s decision to exit the video generation space.” OpenAI responded that they are not completely leaving the AI video track but did not explain the true reason behind Sora’s closure.

Pentagon contract triggers user exodus, executives resign in protest

Weeks before Sora’s shutdown, OpenAI already paid a heavy price on another front.

On February 28, 2026, OpenAI signed an AI deployment contract with the U.S. Department of Defense, including deploying ChatGPT on classified networks. The background was delicate—Anthropic had been blacklisted the day before (February 27) for refusing to remove AI safety features, citing “supply chain risks,” and was barred from the contract. OpenAI quickly stepped in to fill the gap.

CEO Sam Altman later admitted that the contract “looked opportunistic and sloppy”—a rare self-criticism among tech executives.

Market reactions were swift. Data shows that within a day of the contract’s announcement, uninstall rates for ChatGPT surged 295%, and one-star reviews increased by 775%. During this period, Anthropic’s Claude surpassed ChatGPT to become the top free app download on the Apple App Store.

Internal fractures also emerged within OpenAI: head of robotics Caitlin Kalinowski resigned in protest, and earlier, employees had signed an open letter supporting Anthropic’s refusal to cooperate with the Pentagon.

Ultimately, OpenAI amended the contract to include restrictions such as “not for domestic surveillance,” but the full contract details have not been made public.

Quarterly loss of $11.5 billion, unlikely to turn profitable before 2030

The dual blow to product reputation and financial health has led to growing skepticism about OpenAI’s business model.

According to Microsoft’s financial reports—holding about 27% of OpenAI—OpenAI’s Q4 2025 loss was approximately $11.5 billion. Even more concerning, leaked internal forecasts predict that in 2026, losses could reach $14 billion.

HSBC analysts in a research report stated that OpenAI is unlikely to turn profitable before 2030, estimating cumulative losses from 2023 to 2028 could total $44 billion, with profitability possibly achieved only in 2029, with a profit of $14 billion.

Even more startling, HSBC highlighted a $207 billion funding gap. To fill this, OpenAI is actively seeking a new funding round of up to $100 billion.

“The bubble is bursting”: Bitcoin community’s counterargument

The crypto community interprets this crisis differently. Bitcoin maximalist account @TheBTCTherapist tweeted a point-by-point critique of OpenAI’s troubles, concluding succinctly: “The bubble is bursting.”

This statement sparked widespread discussion. Supporters argue that AI companies rely on massive funding, lack clear profit pathways, and depend heavily on external capital—similar to late-2000s internet bubble companies. Bitcoin is seen as a counterexample: with a fixed supply, no need for shareholder injections, and no “AI arms race” pressure to burn more money to survive.

Some observers remain cautious: despite the huge losses, OpenAI’s revenue growth is also impressive, and its fundamentals differ from those of a true bubble company.

Regardless, with Sora shutting down, Disney pulling out, Pentagon controversies, and quarterly losses of $11.5 billion all hitting headlines in the same month, OpenAI’s narrative of “rapid growth with negligible losses” is facing its most severe test since its founding.