OpenAI kills Sora to feed 'Spud,' its next major model
Updated March 24, 2026 at 7:00 PM ET with details on OpenAI's next model and internal restructuring.
When OpenAI shut down Sora, the company framed it as a strategic refocus on productivity and enterprise tools. The fuller picture, now emerging from multiple sources, suggests something more deliberate: OpenAI is clearing the deck for its next major model -- internally codenamed "Spud" -- and restructuring its leadership to get there. The video generator's shutdown is context. Spud is the story.
The codename that follows a pattern
According to The Information, Sam Altman told staff that OpenAI has completed initial development of Spud. The model carries no public capabilities announcement, no release date, and no confirmed public name. What it does carry is a recognizable naming convention: the same food-codename pattern that turned "Strawberry" into o1, OpenAI's first explicitly reasoning-focused model.
The question is whether Spud represents a comparable step-change in reasoning capability, a new architecture, or something else entirely. OpenAI has not said. What Altman's announcement to staff does confirm is that the model exists and that initial development has cleared its first internal gate -- a milestone that in OpenAI's development cycle typically precedes months of evaluation, red-teaming, and staged rollout.
The compute math behind Sora's exit
Sora's shutdown didn't come as a surprise to everyone inside the company. Employees working on the video generation product had complained internally that it was "a drag on the company's computing resources," according to The Information -- a friction point that became harder to justify as OpenAI faced intensifying competition from Anthropic and Google.
Video generation is computationally expensive in ways that don't compound into capability over time the way language and reasoning models do. Training runs that render high-fidelity video output don't make the underlying model smarter. In a resource-constrained environment where frontier model development is the explicit priority, that's a difficult allocation to defend.
The compute freed from Sora's shutdown is likely being redirected toward Spud's training and deployment infrastructure. OpenAI has not confirmed the specifics of that reallocation, but the directional logic is straightforward.
"No side quests"
The internal framing from OpenAI's head of applications Fidji Simo has been direct. At a March 16 all-hands meeting, she told employees: "We cannot miss this moment because we are distracted by side quests... We really have to nail productivity in general and particularly productivity on the business front."
Simo named three explicit priorities: Codex, OpenAI's coding model; winning business customers; and transforming ChatGPT into a productivity platform. She also characterized Anthropic's dominance in enterprise accounts as a "wake-up call" -- a notable concession from a company that has long positioned itself as the category leader in applied AI.
