Disney Exits OpenAI Deal After AI Giant Shutters Sora | Georg Zoeller | 29 comments

[Commerce Dead](/blog/posts/why-openai-s-chat-commerce-play-was-always-investor-bait/). [Sora Dead](https://www.hollywoodreporter.com/business/digital/openai-shutting-down-sora-ai-video-app-1236546187/). GPT Platform Zombified. CopPilot (powered by ChatGPT) failed. Nvidia investment poof, OAI bets are dropping like flies. We’ve talked about OpenAI’s business model being a pyramid shaped “make more promises to get more investor money” here many times, but we’re now past the inflection point - promises are unwinding faster than they are being made. It’s not like video can’t work, plenty of Chinese companies are making money, it’s just that it can’t work for OpenAI at OpenAI economics while Chinese companies are making the money with better, more efficient models, not having to play shell games with free compute. The company is now surging spending to pivot to enterprise, because they don’t have the endurance left to survive in their chosen field - consumer AI adoption - which entirely predictably is turning out to be a long slog because an sycophantic consumer model optimized to drive engagement is not a good fit for enterprise. Microsoft’s 3% conversion of paid CoPilot (out of some 425million) seats shows that enterprise business isn’t exactly humming either. Claude Code is essentially the only product in the market with strong enough product market fit and economics to look like the future. Meanwhile the major investors behind OpenAI - Blue Owl, Oracle, Microsoft and friends all have lost considerable value in the market in the last quarters. {{attachment:1774260480851.jpg}} It certainly looks like the main screw that’s holding the US AI narrative together, which was always lose, is about to fall out. Somehow I doubt the promised horny GPT chatbots will save the consumer business too, they are more likely regulatory bait across the globe. {{attachment:1774530477673.jpg}} And that’s a problem because the “valuation” of the company is solely predicated on its brand and massive consumer user base, of which only 4-5% are paying for the service. That’s a huge [broblem](https://www.linkedin.com/posts/georgzoeller_houston-we-have-a-broblem-ai-literacy-starts-activity-7442502383223599104-23wZ) because these economics lock you into ad based financing at a time Google and Meta altering the deal and the entire ad economy is re-configuring. The initial proposals from OpenAI on ad pricing are laughable when adding it ON SITE cuts conversions to 1/3rd. Insult to injury here because Amazon used the courts to make clear no OFF SITE commerce was going to happen either. There’s a Hololens / Occulus sized joke in the Valley that when your consumer play is finished, you sell shareholders on enterprise to buy time. That's surely looking like it’s happening here. Looks like the only thing Sam Altman is “dropping” lately is feathers. What will the poor influencers do when their Brophets are abandoning them, chill crypto again? 🤡 And that’s actually an underrated signal: Sam’s hype generation x fundraising as a tech Brophet was always OpenAI’s best asset and it is failing, he’s been on defense for weeks now. Next stop: More taxpayer / military pork and an IPO pushed by Forbes articles to retail bagholders “Could be with 10T in 10 years” and Cathy Woods consumer carpet bombing - “Cathy woods loads up on THIS secret tip”.

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