The Real Sora Cost: OpenAI's $5 Billion AI Video Problem

Introduction: The Viral Sensation and Its Hidden Price Tag

In the fall of 2025, the internet was captivated by a new form of magic. Fantastical security videos and bizarre home shopping ads flooded social media, all powered by Sora, OpenAI's groundbreaking text-to-video generator. After its debut on September 30, the Sora app rocketed to the top of the charts, amassing a stunning one million downloads in its first week.

The public saw a revolution in creative expression. But behind this AI spectacle, a different story was unfolding—one defined by a staggering financial reality. The viral sensation came with a hidden, almost incomprehensible price tag. Estimates from Forbes and discussions with industry experts suggest the figure exceeds $5 billion annually, equating to about $15 million each day. This analysis delves into the true Sora cost, a figure that raises a critical question for the entire generative AI industry: can a technology this powerful ever be profitable?

Deconstructing the Sora Cost: A Billion-Dollar Burn Rate

To understand the challenge facing OpenAI, we must look past the mesmerizing videos and focus on the cold, hard numbers. The Sora cost is not a trivial expense; it is a foundational threat to the company's financial stability.

The $15 Million Per Day Reality

According to detailed estimates from Forbes, OpenAI is spending approximately $15 million per day to power Sora. This annualizes to over $5.4 billion. By Halloween, just a month after its release, the app had been downloaded 4 million times. Assuming even a quarter of these users are active, the platform churns out millions of videos daily, requiring a vast and expensive infrastructure of GPUs.

The Per-Video Cost: $1.30

The economics become even clearer when broken down. Generating one standard 10-second Sora clip costs OpenAI approximately $1.30, according to analyst Deepak Mathivanan of Cantor Fitzgerald. This estimate is rooted in the high cost of GPU time. Mathivanan's analysis assumes each video generation takes around 40 minutes of total GPU time, or 8-10 minutes on four GPUs running at the same time, and that renting a GPU costs just under $2 per hour.

The Scale of Daily Generation

If we consider Sora's estimated 4.5 million users and assume that 25% of them post an average of 10 videos daily, that results in approximately 11.3 million videos each day. At $1.30 per video, this translates to nearly $15 million daily, or $5.4 billion annually.

The Context: OpenAI's Broader Financial Crisis

OpenAI is a company currently experiencing losses exceeding twice its earnings. With a valuation around $500 billion, OpenAI announced an annual recurring revenue projection of $20 billion. However, this figure seems less impressive when juxtaposed with the over $12 billion loss it incurred last quarter.

Reports from 2023 suggested running ChatGPT alone cost around $700,000 per day. While this has led to significant losses, OpenAI revenue is also growing at a blistering pace, primarily from its API services and premium ChatGPT subscriptions, reportedly growing to an impressive $3.4 billion annualized run rate by mid-2024.

The Unsustainable Economics and the End of the Free AI Video Generator

In a moment of striking candor, OpenAI's head of Sora, Bill Peebles, stated on October 30 that "The economics are currently completely unsustainable". He was right. Allowing millions of users to create Sora videos at no cost is a bold strategy, albeit not unusual in the tech sector. OpenAI is attempting to capture market share and enhance visibility at a loss, banking on the hope that sufficient users will adopt Sora to reduce costs and subsequently increase revenues once it begins charging.

The decision to launch a product that dramatically increases cash burn is a calculated risk—betting that market dominance today will translate into massive profits tomorrow. CEO Sam Altman acknowledged that "there's so much usage where people are just making funny memes to send to their three friends and that there is no ad model that can support the cost of that kind of a world".

The Pivot to Profitability: Managing the High Sora Cost

Faced with unsustainable expenses, OpenAI was forced to pivot to a strategy focused on revenue. The first change was a paywall for power users: once daily free credits are exhausted, users can now purchase 10 additional video generations for $4. This immediately answers the question of whether Sora costs money—it now does.

According to Sora's listing on the Apple App Store, a small pack containing 10 additional generations is priced at approximately $4. However, the number of credits consumed per video varies based on "length, resolution, and other factors," according to OpenAI's support documentation.

More strategically, Peebles warned that the current generous limits—100 daily generations for Pro subscribers and 30 for everyone else—are about to get slashed. "Eventually, we will need to reduce the number of free generations to support growth," he remarked.

The Broader Strategy: Learning from Silicon Valley's Playbook

It's a classic internet strategy to initially prioritize audience growth and engagement over cost, as we've repeatedly seen companies find ways to monetize that engagement. This approach was famously used by Google, Facebook, and YouTube. By keeping Sora free, OpenAI is training its models using billions of user-generated text-to-video prompts, giving it a powerful data advantage over rivals.

Analysts predict that video inference costs could drop fivefold by next year and further reduce to three times less by 2027. If these projections hold true, the current $15 million daily burn rate could decrease dramatically as the technology becomes more efficient.

Outlook: Bubbles, Breakthroughs, and the Future of Intelligence

OpenAI's strategy is a high-wire act. Sam Altman has drawn parallels between the current AI investment frenzy and the dot-com bubble. However, he maintains a firm belief that the underlying technology is fundamentally transformative. His long-term vision is not just to manage expenses, but to radically reduce the "cost of intelligence" itself.

This ambition runs into a profound physical barrier: energy. The massive energy requirements for future AI are a deep concern for Altman, which is why he has personally invested in nuclear fusion. The story of the Sora cost is therefore about more than just a single product's balance sheet. It is a microcosm of the entire AI industry's struggle to reconcile revolutionary capability with economic and physical reality.

Frequently Asked Questions (FAQ)

1. How much does it cost OpenAI to generate a single Sora video?

While OpenAI hasn't published an official figure, industry analysts estimate the internal Sora cost to be around $1.30 per 10-second video, according to analyst Deepak Mathivanan of Cantor Fitzgerald.

2. So, does Sora cost money for users?

Yes. Sora is not a completely free service. Access is primarily bundled with paid subscriptions like ChatGPT Plus, which provide a daily allowance of video credits. Once those free credits are used, users must pay for additional generations, establishing a direct monetization model.

3. How much are users paying for extra Sora generations?

According to Sora's listing on the Apple App Store, ten additional video generations cost approximately $4. However, the actual credits consumed per video depend on various factors including length and resolution.

4. How can I get access to the Sora app?

Currently, Sora has expanded beyond invite-only status and is available more broadly. Access is integrated into ChatGPT subscriptions and available through the iOS app in the United States and Canada.

5. Are there any free AI video generator alternatives to Sora?

Yes. While Sora is now monetized, several other tools are available for users looking for free AI video generation. Popular alternatives like Luma Labs' Dream Machine, Runway, and Pika Labs offer free trials or limited free plans, each with different features.

6. How does OpenAI make money if its costs are so high?

OpenAI revenue comes primarily from selling access to its AI models. Its main income sources are paid subscriptions for premium services like ChatGPT Plus and its API, which lets businesses pay based on usage. OpenAI revenue has grown rapidly, reaching a reported $3.4 billion run rate by mid-2024.

7. Is the current AI boom a "bubble," according to Sam Altman?

Sam Altman has acknowledged the industry is in a hype cycle and compared the frenzy to the dot-com bubble. However, he firmly believes the underlying AI technology is real and will create enduring, powerful companies, much like the internet did despite the initial bubble.