Is OpenAI losing its edge? A string of setbacks puts ChatGPT at a crossroads

OpenAI built its reputation on ChatGPT, the chatbot that introduced millions of people to generative AI. But a series of product failures, cancelled deals, and a shifting competitive landscape are raising questions about whether the company can hold on to its lead.

The most visible sign of trouble came when OpenAI abruptly shut down Sora, its video-generation tool, which had been widely promoted as the next big thing after ChatGPT. OpenAI had struck a high-profile deal with Disney, which had agreed to invest one billion dollars and license more than 200 of its characters for use in Sora videos. Disney executives learned about the shutdown less than an hour before it was announced publicly, according to the Wall Street Journal. The investment never went through, and the relationship between the two companies is now effectively dormant.

Sora was losing roughly one million dollars a day, and at its peak was burning through an estimated fifteen million dollars daily, according to the Wall Street Journal and Forbes. Worldwide usage peaked at around one million users shortly after launch and then fell below 500,000. Lifetime in-app revenue amounted to less than three million dollars, according to data cited by Forbes. OpenAI concluded that Sora consumed too many computing resources and was not profitable enough to justify its continued operation.

A pattern of reversals

Sora is not the only OpenAI product that has failed to deliver. Forbes describes a broader pattern of announcements that have not lived up to expectations:

• An Instant Checkout feature for shopping within ChatGPT, developed with Walmart, was discontinued after conversion rates proved far lower than on Walmart’s own website.
• Plans to allow adult content in ChatGPT were put on hold indefinitely following pushback from staff and investors.
• The popular GPT-4o model was retired, prompting a significant backlash from users before being briefly restored and then retired again.

OpenAI’s App Store-style platform, which allows third-party companies like Spotify and Booking.com to offer services inside ChatGPT, has also struggled. Bloomberg reports that developers have faced lengthy approval processes, buggy tools, and a near-total absence of usage data. Booking.com’s chief executive told Bloomberg that referral traffic from ChatGPT remains small, and that the company still spends far more on Google advertising.

Competitors are gaining ground

While OpenAI works through these setbacks, rivals are advancing. Anthropic, the company behind the Claude AI assistant, has built a strong position in the enterprise and coding markets. The Wall Street Journal reports that its coding tool, Claude Code, has been widely adopted among software engineers. OpenAI scrambled to release a competing product, Codex, in response.

The shift in perception is also visible in financial markets. Bloomberg reports that secondary market demand for OpenAI shares has dropped sharply, with about 600 million dollars worth of shares offered for sale finding no buyers. At the same time, demand for Anthropic shares has surged, with one marketplace registering more than 1.6 billion dollars in interest. Buyers are valuing Anthropic at roughly 600 billion dollars on the secondary market, more than fifty percent above its last funding round valuation, according to Bloomberg.

Google’s Gemini assistant has also grown more popular with consumers, adding to the competitive pressure on ChatGPT.

Focus shifts to enterprise and productivity

OpenAI is now redirecting resources toward coding tools and enterprise software, areas where demand is already proven. The company plans to build what it calls a superapp, focused on agentic AI that can carry out tasks such as writing software, booking travel, and analyzing data on behalf of users. According to Forbes, OpenAI had thirteen billion dollars in revenue in 2025 but remains deeply unprofitable.

Sam Altman described the decision to shut down Sora as a difficult but necessary trade-off. In an internal note, he said he was encouraged by the team’s willingness to make hard decisions. An OpenAI spokeswoman told the Wall Street Journal that the company is focused on applying its computing resources where they create the most long-term economic value.

Whether that refocus will be enough to restore confidence is not yet clear. What is clear is that the competitive landscape for AI has changed significantly since ChatGPT first launched, and OpenAI is no longer the only company setting the pace.

Sources: Wall Street Journal, Forbes, Bloomberg, Bloomberg