Good morning, Alexei Oreskovic here, taking the baton back from features editor Matt Heimer, who graciously filled in for me these last couple of days. And wow, what a burst of surprising happenings to come back to:
OpenAI has officially pulled the plug on Sora, its much hyped video generating app; Arm Holdings, the longtime chip IP licensing company, announced it would start selling its own silicon chips; Meta lost a major court battle accusing it of harming teenagers, with the jury awarding the plaintiffs $375 billion in damages (Meta says it will appeal).
All of these events are sure to reverberate across the tech industry in the days and weeks to come (we dig into some of them in more detail below). As with many surprises, there were signs foreshadowing the news that will now have more meaning or seem obvious in hindsight (and as with all surprises, there are plenty of punters now crowing about how they “called it” way back when).
Alexei Oreskovic
@lexnfx
alexei.oreskovic@fortune.com
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OpenAI kills Sora
Talk about a script change. OpenAI announced that it's "saying goodbye" to Sora, the AI video generation product that it launched to great fanfare in 2025.
What makes the move even more stunning is that OpenAI and Walt Disney Co. had just struck a landmark three-year deal in December, with Disney pledging to invest $1 billion in OpenAI and handing OpenAI the exclusive right to incorporate hundreds of famous Disney characters into the AI product. It seemed as if OpenAI was set to become a major player in Hollywood, not to mention leapfrogging all the other AI video startups out there.
So why is OpenAI calling it quits? OpenAI isn't saying much (it announced the shutdown in a four-sentence post with few details, shortly after the Wall Street Journal reported the plans Tuesday).
It's probably not a coincidence that the move comes as OpenAI is trying to focus on its most important products amid fierce competition with Anthropic and Google. OpenAI recently merged several of its products into a single desktop 'superapp' and told employees to stop spending time on 'side quests.'
But if OpenAI saw main quest potential somewhere in Sora's future, it probably wouldn't be casting it aside so swiftly.
Some observers on X and on Reddit speculated that the energy and computing costs of generating ultra-realistic video clips were probably too big of a money sink—especially if Sora's main users were dabblers unlikely to become paying OpenAI subscribers. And with an IPO rumored on the horizon, OpenAI needs its financials to sparkle.
It's also possible that OpenAI decided the legal and reputation risks involved in running a video generating app (deepfakes, IP infringement, etc) were too much trouble. Yes, the Disney deal was a huge win for OpenAI, but we haven't seen any other studios ink similar deals with OpenAI.
As for that Disney deal, which was struck by outgoing CEO Bob Iger: it's now dead in the water, according to various media reports.—AO
Arm is making its own chip
Reinventing your identity after forty years might sound like the telltale signs of a mid-life crisis. And in the case of 36-year-old chip design company Arm Holdings, a surprise announcement about its business model on Tuesday is raising eyebrows in the tech world. After decades of licensing its chip architecture to other companies (the processor inside your Apple iPhone, Qualcomm's Snapdragon processors, and the CPU portion of Nvidia's GPU products, to name just a few examples), Arm is doing something it has never done before: it will make and sell its own chip.
The chip, dubbed the Arm AGI CPU, will be specifically designed for AI workloads in data centers, and is being co-developed with Meta. That could put Arm in competition with many of the chipmakers who pay to license its chip designs, including Nvidia. It's a tricky line to walk, even if—as Arm told the New York Times—the new chip is more of a side-hustle targeted at a very limited number of cloud giants with specialized needs.
The history of tech is full of examples of companies who tried to license their technology to customers while also selling an in-house product that competed with those same customers. Customers usually don't appreciate it, and the experiments often proved short-lived (remember when Apple licensed its operating system to clone-makers in the 1990s?). Then again, we're in the age of AI, and many assumptions about wise business practices are being re-assessed (or ignored)—just think of all those "circular" deals AI companies are doing with each other.—AO
Apple is putting ads in Maps
Apple is set to start selling ads in Apple Maps in the U.S. and Canada this summer. In a significant expansion of the company's advertising business, the company is launching a new initiative that gives businesses with a physical listing the ability to bid for placement next to relevant search results. Users will see a single ad per search, marked with a blue halo on the map pin and an "ad" label in the suggested places list. Apple has assured customers that user data won't be linked to Apple accounts, stored, or shared with third parties.
The Maps rollout is part of a broader restructuring Apple is calling Apple Business, which consolidates its existing suite of business tools—Apple Business Connect, Essentials, and Manager—into a single platform. The unified offering also adds new productivity tools, including a business email and calendar, an employee directory, and a free MDM product for device management. The platform will be available in 200 countries and regions from April 14.—Beatrice Nolan
More tech
—Meta loses major child safety case. $375 million in damages and a huge precedent.
—SpaceX IPO! Filing could come as soon as this week.
—Boring Co's ‘structural failures’ under scrutiny in Nevada. Legislators press Governor on oversight.
—Federal judge troubled by Pentagon's Anthropic treatment: 'looks like an attempt to cripple Anthropic.'
—Epic to lay off 1,000 workers. A 'downturn in Fortnite engagement.'
—Neal Stephenson on the death of the metaverse: People don't like wearing these things on their faces.
AI Playbook: The future of software development
Will software developers become obsolete? AI is increasingly competent at writing code, allowing non-coders to enter the software game and rendering some junior coders obsolete. But as Fortune AI Editor Jeremy Kahn explains, AI still hallucinates and makes mistakes, making experienced coders essential for quality control and reliability. Watch the playbook.
