Ep 742: OpenAI's Most Chaotic Week Yet? Sora's Dead, New Models are Coming and What it Means for You

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The past week has been a chaotic roller coaster ride for open AI and if you've been following, you may have gotten whiplash.

So the company with plans to go public has grabbed just about every headline good and bad over the past seven days.

And as a former journalist and someone that's been covering AI daily for three years, this was not a normal week for open AI or any big tech company really.

I mean, the amount of moves they're making is head spinning and I see this as the chaos before the call before the storm.

And the main headline that most people will be talking about this week is that open AI killed is once viral AI video platform Sora.

Or maybe that their biggest investor in Microsoft may reportedly sue them for a deal they did with Amazon or maybe that the chat GPT in app shopping experience fail then didn't go as planned.

So doubters will see those things in the open AI naysayers will say that these are the latest signs that open AI is bound to fail personally, I see it a different way.

I see a company that through the proverbial spaghetti at the wall throughout 2025 to see what stuck in is finally clearing all that mass and is honing its focus in on its core products.

As it prepares to potentially go public any more than one trillion dollar valuation.

So whatever your viewpoint is on open AI this week alone have like a year's worth of developments.

And even if you're a casual chat GPT user or novice in the AI space, you absolutely need to understand the past week of developments at open AI because it will undoubtedly be talked about in a decade as a moment that started to either make or break the company.

All right, we're going to be getting into it on today's episode of every day AI, but before we tell you about that, here's the big picture.

Ready, here's the school on open AI made more moves in seven days than most companies make in a year.

But essentially they're just killing what isn't working and they're going in all in on chat GPT and its new super app platform.

And like I said, this week I think it's going to be remembered as the make or break point when we look back in three, five, ten years on where open AI is or maybe isn't as a company.

And I think you will be able to wind back in time and look at this week and open AI's response to this specific week as that moment in time.

So on today show we're going to be talking about what open AI's retreats and pivots reveal about where the entire AI industry is actually headed.

Why I think open AI's squashing side projects like Sora and shopping isn't a weakness.

It's actually a strength and why open AI's chaotic week is actually a very calculated strategy to prepare for a potential trillion dollar IPO.

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So here's the most recent big headline as we jump into it because this is what I think most people are going to be talking about for well, at least a week or so and maybe longer.

And it's that Sora is dead. So open AI just announced that the standalone Sora app is shutting down.

And this happened just six months after launch. So a report say it's consuming too much compute and I absolutely agree with that.

So as of like two weeks ago, we saw reports that the plan was to fold Sora ultimately into chat GPT and we actually saw some coded leaks that show that they were working on this.

But you know, two weeks after that, this thing is killed entirely and it's not just the Sora app, right.

It was also everything that it had along with it.

You know, importantly, that billion dollar Disney deal, right. There was a certain licensing agreements that open AI and Disney worked out for, you know, users to use Disney characters.

And as part of that, Disney provided a one billion dollar capital infusion. So yet that's gone now.

But reportedly, no money ever change hands. But what's important to remember here is what Sam Altman said when Sora was first released.

He essentially said that if Sora didn't improve people's lives in six months that they'd readjust. And here we are less than six months later and well, it's gone.

And I'll say what I said then now if you didn't hear after Sora came out, I very much called it brain rot, right.

I think a lot of people for whatever reason accuse me of being an open AI, you know, showing for them that's not my thing. They've never paid me a dollar.

Well, their competitors have, which is interesting. No, I say that because I think that open AI top to bottom is the best in the easiest AI platform.

If you're trying to bring your day-to-day, you know, knowledge work into an AI operating system. I think Chagy BD is still the one best platform for that top to bottom for most enterprises.

But as I mean, I blindly think that everything they do is amazing. When it came out, even though it was viral and I said, yeah, there are some good use cases and you can get some utility out of this, especially if you're in charge of creative at your company.

But I said for the most part, Sora is brain rot. Yeah, it's cool. It's fun. You know, but you had to sign up for a specific app to use it.

And the app was essentially just AI videos on repeat. I'll say the same thing about Meta's new vibes platform. It's brain rot. Right. I'm not someone that is scrolling, you know, social media shorts, reels, ticktocks. Right. That's not me. I think that's, you know, it's my opinion. Right.

But I don't think that really helps anyone. So actually got to tip the cap here to Sam Alvin for following through. Right.

Reportedly, there's other reasons that it maybe just wasn't bringing in enough money and open AI needed to essentially reallocate the massive compute that they needed to keep up with the Sora demand, even though it wasn't as viral as it was.

I think that there was still a lot of, you know, heavy power users that were eating up a lot of compute and instead, you know, open AI has said that they're going to kind of reallocate that to other areas of the business.

But I think people are going to look at this as well. No, Sora failed. Right. It didn't bring in enough money. I don't think that.

But Sora going down is just the latest in a absolutely wild week for open AI. Ready. I'm going to read you the timeline of the last couple of days, the last week or so here.

This is a week. Ready. Not a year, not a quarter, not a month. This is the week. All right. So March 18th.

We saw reports that open AI's biggest investor, Microsoft is considering suing the company over its cloud deal with Amazon March 19th.

We finally got reports that open AI was going to merge chat GPT codex and their browser Atlas into a single desktop super app at some market moving news.

Then the next day on March 20th, we got the story that open AI was abandoning their instant checkout shopping feature. So, you know, the headline said that it failed and that they were instead pivoting to visual product discovery.

Then on March 21st, yeah, so that was, yeah, on the weekend, we saw a story that said that open AI was planning to double their workforce.

That does not happen. Right. So I think right now their head count was roughly 4,500 and reports say that they're going to try to hit 8,000 by the end of the year.

So nearly doubling their workforce, even though in January, they said that they were going to slow down hiring. Then also over the weekend, we saw open AI hiring a meta exec to lead their advertising push.

They launched a library feature a small thing, but I think it actually has larger implications than we think.

Then also over the weekend, we saw some pre IPO, right. So yeah, open AI reportedly preparing for its initial public offering this year. So we saw some pre IPO docs flag Microsoft reportedly as a major risk for open AI.

We also saw the potential helium fusion energy deal mounting with Sam Altman stepping down from the helium board.

And then the mountain view campus lease. My gosh, they are nearly half million square foot building that they're now planting in Google's backyard. Right.

And then oh, Sora killed. Oh, and not only that, you know, earlier this week on Tuesday that we got the news that Sora was killed and Disney walking away from the one billion other deal, but also that they raise another $10 billion as part of a $120 billion round.

And that they have their newest model. That's a completely new pre trained model. So not a, you know, a slightly step up from a 5.4. They have a whole new model that's been pre trained from scratch, ready to go.

And they just had a $1 billion nonprofit pledge. This is only seven days. Right. It's been an absolutely chaotic week for open AI. So let's dig in a little bit more.

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And I think this kind of goes into a couple of phases, right? Because ultimately, I think they're number one sharpening the core. Number two, they're shedding the side quests.

And number three, they're fueling the AI engine with capital for writing it is some infrastructure problems. And five, I think all of this ultimately sets up for the new playbook.

So the, the, the shedding of the side quests was a lot more than just Sora. So we also said that the instant checkout that open AI was demoing inside of chat LGBT. Well, it wasn't really going well. And it seems like some of their biggest partners like Walmart Shopify and Etsy all pulled away.

And reportedly Walmart had a three times lower conversion rate inside of chat LGBT than on Walmart's own website. So instead, open AI is now pivoting from kind of owning the checkout to instead owning the discovery.

So there's something that they're going to be pushing more instead of, you know, bringing all this different, you know, merchant checkout inside of the chat LGBT, you know, new super app, whatever that may be or in current days, chat LGBT app instead bringing in a more owning the discovery.

So comparisons reviews and then routing them to the retailer. And those aren't the only side quests that died. Right. That's just what died this week. Right. But before this week, we saw reports that they're highly anticipated.

Adult mode was delayed. Their AI hardware was delayed, you know, maybe until 2027, the Stargate extension was canceled. And then you have other, you know, big splashy features from 2025, right. All the spaghetti that got thrown of the wall.

There's a lot of things this haven't been touched. Right. In pants voice mode, barely touched or updated agent mode made a huge splash barely touch or updated. So it does seem like this combination of open AI, sharpening the core in shedding side quests, just to really focus on what matters.

That's not what the narrative is saying. Right. There's been this recent. I think the rest of the world is finally started a very small sliver. Right. It's starting to like understand who Anthropic is. Right.

If you listen to this podcast all the time, you obviously know who Anthropic is. But I think the rest of the world is like, oh, what's this claw thing? Right. It's funny. I actually got a group text, you know, from a friend group. Right.

Someone had just discovered clawed for the first time. But that's, that's the reality. Right outside of our, you know, AI bubble that many of us live in. Most people have never heard of Anthropic. They don't know what claw is. So I think that there's been this recent, you know, kind of surge where the rest of the, you know, non AI bubble world is figuring out about claw.

And so you have that coincidentally coinciding with open AI's most chaotic week ever. So this, you know, narrative that's bubbling to the surface is well, opening eyes going to fail. They're going to go bankrupt. It's all Anthropic. It's clawed. No, that's absolute nonsense. Right.

Full disclosure. I love clawed. I hate their limits. Their limits stink.

I have a completely different business plan that open AI. A lot of their features aren't as good. But I paid $200 a month for clawed max just like I paid $200 a month for chat.

It's a great product, but they're not losing to Anthropic. That's just a narrative that I think is, you know, popular to post about on social media, because clawed has, well, they've been winning 2026 so far. Right.

I think hands down Google won 2025, open AI won 2023, 2024. And so far, at least it's very early. Anthropic may be winning 2026. But this doesn't mean that open AI is going bankrupt. And yes, we know they're burning money. But guess what?

We've talked about this on the show before. Some of the most profitable companies in the history of the American enterprise burned billions of dollars.

Tens of billions of dollars before ever becoming profitable. Right. And we've seen reports that open AI may not be profitable until 2030. I'm actually would say maybe before that.

I am, even though the first round of advertising in chat, which he didn't work as well as they thought, I think with open AI's recent hire, which we're going to talk about here in a couple of minutes. Yeah, I think open AI is going to be literally printing money with their ads business.

I actually think that killing all of these side projects, people only see the failure. I see that as a strength because essentially what we're seeing in 2026 with anthropic winning the year, they're not winning the race, not even close, but they're winning the year.

I think that's because, well, anthropic from the beginning said we don't care about users, the total number of users, we want to own a domain, we want to own coding.

Because once you can own coding, you can start to own agent work flows, you can own the harness.

And then as coding becomes better and recursive, perhaps, you know, then you can start to own different sectors of knowledge work. And I think that's where we see within traffic right now.

And maybe this might be the first time, maybe again, this could be coincidental, the timing of open AI preparing for an IPO with anthropics, you know, kind of dominance in certain sectors, right high value knowledge work, legal finance, etc.

But it seems now like opening eyes, taking a play, taking a page out of the anthropic playbook and saying, okay, well, now we need to narrow our focus and start, you know, really doubling down in the areas that matter.

You know, Sora didn't stick, shopping didn't stick, so they scraped it off the wall and moved on. And that's a good thing.

So what's it mean for you? Well, expecting the future, right, when we see a, the new super app, you know, any, any week, any month now, I think what we will see is more product updates.

And I think we will see fewer kind of distractions, so to speak out of open AI. And I think we will see at least for the second half of 2026, a likely more focused product line focus on the enterprise focus on knowledge work and focus on those high value sectors.

So more depth, I think, to the tools that you actually use.

And you can tell that's coming because the money hasn't stopped investors for the most part, the big ones, writing the billion dollar checks, they're not dumb.

Right, you know, open AI just this week raised another $10 billion in their total latest round now exceeds $120 billion with a post money valuation of $850 billion as they prepare for their IPO.

And let me just say this, right, if you don't follow things like I follow, right, so if you look at market caps of companies in the US right now with that post money valuation of $850 billion.

Open AI would be the 11th largest company in the US by market cap right there technically their post money valuation would be their market cap today.

If they were a public company, they're a private company, but they're the most valuable private company out right now.

And they will be by the time they IPO, especially if it hits the trillion dollars, they'll be either the ninth or the tenth biggest company in America by market.

Right, yes, they're not going to make money for a couple of years and that's very normal for a company like this.

And I think that you just have to follow the money, even through all this, even through all the reports, you know, open AI is shutting down, they're going bankrupt.

And guess what, they're still caching $100 billion rounds.

And I don't think that's going to change. And their CFO, Sarah Fryer did recently just say this, she said, I need to make sure the company is healthy and ready to face the public markets kind of alluding to all of these kind of side quests that are, you know, now dying or dead or dormant.

And instead, the core business is growing and improving in a big part of that core business will be the new super app that we saw reports of earlier this week.

So number one, I'm glad this is happening. Right, I've been shouting on this very, you know, podcast that I do know some open AI people listen to and I have reached out to them and said, like, hey, and I know I'm not the only one, right?

But I've been like, what inthropic is doing with their desktop app is great in the Mac, right?

It's one app, it has clawed chat, clawed co-work, clawed code, very easy, very simple, right?

Where right now, chat GBT has a chat GBT desktop app, they have a codex and they have an Atlas browser, right?

I'm staring at three different icons on my dock right now. It's confusing.

And what I still don't think people understand about codex as an example, right?

As clawed code and clawed co-work, you know, take off in a very viral way, codex can do up until clawed this past week, just kind of introduce the complete computer use where clawed can control you.

The clawed can control your entire computer, which is cool to use. I love it, eats through credits, you know, or sorry, eats through tokens really quickly.

But until that, you could do almost everything in codex that you could do in co-work or clawed code.

And I don't think people realize that. And I think maybe that's a reason why open AI is going away from this strategy of having the three different apps and bringing it all into one roof.

Codex is a freaking monster for knowledge work. Yeah, it's great for coding. I love, you know, I kind of go back and forth between clawed code and codex.

And I always use both on any project and sometimes anti-gravity as well from Google.

But codex for knowledge work is absolutely amazing. So the super app concept is essentially they're bringing chat GBT, codex and Atlas, their browser all in one.

You know, what this is setting up for is just straight dollar dollar bills, y'all, because when you bring all of that context, right, and this new library feature, right, I said is a little feature that they introduce.

And I saw that and I'm like, this is actually big, right. It's essentially a central location for any file that you've ever uploaded. But think of that across browser, across codex and across chat GBT.

So I think, you know, chat GBT and or sorry, open AI is starting to lay the foundations for the future of this super app.

But I think ultimately what that leads to is the ability for them to make more money sooner and faster because, well, they'll be able to sell a lot of ads when they have all of that information on people.

So aside getting back to the money, right, and what their CFO, Sarah Friar, send about essentially having to be lean before they go public open AI.

We've also saw reports this week that they're offering private equity firms guaranteed 17 and a half percentage point returns to deploy AI across their portfolio companies.

So they're essentially trying to buy PE lock in before they even go public.

So that's what I say. I think this is the chaos before the calm before the storm.

Here's what I mean by this. Spend one of the most chaotic weeks ever for open AI or any tech company, probably in recent memory, since I've been doing this, at least with the number of just the sheer quantity of head turning moves.

Multiple the day that you're like, what the heck is going on, right, that's the chaos.

And I think that the brass at open AI want the calm, they need to get to the calm before the storm, which is the IPO, right, because before any company goes IPO, that's when all the dirt comes out, that's when everyone comes out with their, you know, campaigns against them.

So, you know, companies know it gets messy right before you go public. It's a huge deal about, you know, what that IPO hits at in the initial reception.

So they want to have as much control on the company in its direction as possible from a comms perspective, from an identity of a brand image, everything they want that all under wraps.

So this is the chaos they want to get to the calm, and then there will be the actual storm of going public.

So to get there though, they have to deliver, you know, we don't know if they're going to go public in the second half, you know, third quarter, that's what I've seen from a lot of reporting, but they may not even have the compute that they need, even after they shut down compute heavy projects like Sora.

So, you know, Sam Altman did step down from the helium energy board this way to clear way to clear the way for open AI to potentially enter into a massive fusion power deal.

And well, maybe that's tied to the other piece of recent news that open AI and Oracle dropped a massive Texas data center extension and Microsoft stepped into rented instead.

So it is interesting that Microsoft had plans right this is concept of well, they need more and more compute and then they had this stargate extension lined up for more compute and they had to well say no to that extension and then Microsoft came in so a lot of people are saying well if they couldn't complete that why and maybe this fusion power deal has something to do with it or maybe it's just about the you know access to capital in what waves right obviously.

You know with the different hardware plays right we've seen open AI is potentially entering entering into some custom civil can deals you know consumer hardware a lot of different things they still have going on even after killing some of these side quests, but I think here's what this means for the larger AI race.

The best model doesn't really matter as much anymore right we talked about this on our start here series couple of weeks ago I think the harness and the tool use matters more at least versus just an actual next best model right we saw reports on this new model codenamed spud that open AI is working on but it's now about who has the compute right who is the electricity who is the chips who is the data centers to run it.

And I think that's what we are starting to see here because a lot of the moves that open AI is making seemingly is to reduce the compute that they're spending on consumers and on projects that are maybe not in their long term vision to profitability or in their long term vision to an IPO so it seems like if it's not something that's going to immediately make them.

You know riches and the niches of the enterprise or something that's going to set them up for an IPO they're cutting it off, especially if it's compute heavy because they need to allocate those resources for other reasons.

And then yeah the whole Microsoft problem can't ignore that right that's another kind of big check mark that open AI hopes to check off in the chaos before the column before the storm.

So Microsoft is reportedly considering suing open AI over the $50 billion Amazon cloud deal that open AI and Amazon entered into and Microsoft is saying that it violates their Azure Azure exclusivity.

So essentially open AI and Amazon reportedly built a technical workaround to the Microsoft and open AI deal and Microsoft says it kind of violates these spirits of the contract.

Meanwhile open AI's own pre IPO investor docs name Microsoft as a potential business risk.

So yeah the partner that built open AI up is now maybe the partner that could potentially hold them back a little bit as they start to you know kind of

lean in get leaner and lean in to longer term profitability so that one is going to be a relationship that is especially important to watch.

And not just for you know us us AI dorks to have something to talk about of the water cooler or the next conference that's not what I'm talking about.

This is going to impact how you work because you probably don't know this but even if you the majority of people out there are using Microsoft 365 co pilot right you don't know it but there's open AI models have historically run co pilot top to bottom.

Over the past couple of quarters Microsoft especially inside of their apps inside of their 365 apps like Word PowerPoint Excel et cetera have started to put in cloth.

So the very models that are powering your day to day work might get swapped out we don't know this could potentially lead to a major rift between open AI and Microsoft.

So here is the new playbook for open AI as we close up this episode.

Kill the side quests consolidate into one super app that's chat to be T codex and Atlas and then raise the money lock in the enterprise monetize the audience secure the infrastructure and prepare for IPO it's a very simple playbook.

And I think the other big thing that's going to be happening in the interim right aside from killing all the side quest getting the super app you know

going after high value sectors is their recent higher.

So Dave Duggan was hired from meta to run chat GPT ads.

So right now open AI has 900 million weekly active users and their first kind of ad for a for their first advertisers and they're better in their beta round had to come in with a 200 k minimum ad buy and some of the early story so far said that.

Well maybe wasn't as good as they thought right there wasn't exactly a lot of reporting a lot of attribution and advertisers spending a minimum 200 k might usually want.

That's something to keep an eye on because I think open AI has had a couple of recent he hires from meta specifically to work on the ad side of the company so as they rotate in migrate into the super app.

Yes it is to make it easier for consumers but it's to right 90% of people are on the free play it so that's I don't know i'm not great at math but that's more than 800 million free users that if they're using this super app I know not all of them are going to use it because you know a lot of people are just going to use the web but still just the amount of advertising.

Having all of that information in there right you share keywords with Google you show your deepest darkest darkest secrets with chat GPs and chatbots of the worlds right so not only that but two other key factors here looking at open AI's new playbook but the doubling head count by the end of the year.

While and then literally planting a five a nearly five hundred thousand square foot.

New office in Google's backyard.

Why would you do that well so you can more easily you know the closer you are to your enemy the more fun you can have so that'll be a another storyline to continue to watch but more of the story here.

Open AI is not going away right even with their crazy chaotic week shutting down Sora some of their other side projects dying all they're doing they're getting leaner more focus not weaker they're getting stronger and yeah it's the chaos but I can't wait after the calm to see the storm.

Alright and here's why this matters for you well if you use chat you can expect a more focus more capable product but also expect ads if you are on a free or the chat you paid go plan and probably more commercial features right so even if you are on a paid plan and the same way that inthropic you know allows you to buy credits that something that chat you can he has on their business plans I might expect that to come down to the normal consumer plans as well.

If you're a business leader the platform wars just enterprise just entered the enterprise lock in face you know so you do have to think about picking your AI ecosystem now and if you are in a skeptic.

Strategic retreat is not collapse what open AI is doing right now is doesn't mean they're my gosh there's actually smart people out there they're like oh you know Sora's dead this is the latest sign open AI is going bankrupt I called it first right no.

It's how business works right now this is a company that by today's measures is technically the 11th most value right once they close out this this funding round their post money valuation would put them at the 11th most valuable company in the US by market cap those companies don't just get that valuation or that market cap by sheer luck no they do it because they have a tremendous business model that is.

A generation generational company in the new model don't forget about that brand new codenamed Spud it is ready and apparently it is going to really impact the economy right according to the brass there at open AI so the money is raised the workforce is expanding now they have to ship and we just get to watch and well maybe enjoy more chaos.

That's it for today's show taking a look and quick ish recap when one of the wildest weeks i've ever seen for a single AI company since i've been doing this for daily for three years so like I said even if you're not an average energy user even if you're just a novice whatever happens as the result of this week I think has long standing impacts across not just the AI industry but the tech sector as a whole so.

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