* Streaming * AI * Entertainment # Disney’s big bets on the metaverse and AI slop aren’t going so well The studio’s $1 billion plans to collaborate with OpenAI and Epic Games seem to be falling apart. The studio’s $1 billion plans to collaborate with OpenAI and Epic Games seem to be falling apart. by Charles Pulliam-Moore Mar 25, 2026, 8:02 PM UTC Epic Games [](/authors/charles-pulliam-moore) Charles Pulliam-Moore is a reporter focusing on film, TV, and pop culture. Before The Verge, he wrote about comic books, labor, race, and more at io9 and Gizmodo for almost five years. Less than a week into his tenure as [Disney’s newly-appointed CEO](/news/872972/disney-ceo-bob-iger-replacement-josh-damaro), Josh D’Amaro is already dealing with two separate crises that have cast a shadow over the company’s future plans. [OpenAI is shutting down its Sora image-generation program](/ai-artificial-intelligence/899850/openai-sora-ai-chatgpt) just months after [Disney announced](/news/842348/disney-openai-sora-chatgpt-images) a $1 billion dollar collaboration to [bake the tech into Disney Plus](/ai-artificial-intelligence/842992/disney-openai-sora-ai-slop-partnership). And Fortnite maker Epic is [laying off 1,000 employees](/games/899529/epic-games-layoffs-fortnite) at a time when we’ve heard basically nothing about [the game studio’s $1.5 billion investment deal](/2024/2/7/24065281/disney-epic-games-investment-fortnite-metaverse) with Disney to [build a metaverse](/2024/10/4/24261555/epic-disney-fortnite-unreal-fest). Disney could still integrate generative AI into its streaming service, and we might end up seeing some version of the company’s metaversal dreams become reality. But yesterday’s news from OpenAI and Epic point to an uncertain future for some of Disney’s biggest bets. [There have always been signs](/ai-artificial-intelligence/825498/openai-sora-video-slop-nostalgia-mister-rogers) that Sora was far from being ready for the big leagues (read: used to produce studio-approved entertainment). But OpenAI’s decision to shutter Sora came as a surprise, in part, because of how the Disney deal helped normalize the idea of [major companies getting into bed with gen AI firms](/ai-artificial-intelligence/848119/hollywood-film-tv-ai-2025). In addition to giving OpenAI a massive influx of capital, the deal with Disney — which would put user-generated AI content directly onto Disney Plus — gave Sora a level of legitimacy that could have had a huge impact on how the public thinks about and engages with this kind of tech. Disney Plus would have also become flooded with AI slop that truly no one would see as a compelling reason to sign up for the service. But the legacy studio could have still patted itself on the back for being a trailblazer in the AI space and spun that to investors as a sign of it having a deep understanding of how to capitalize on tech trends. The situation reads very differently now — especially with OpenAI currently being under fire for [helping the Pentagon conduct mass surveillance](/ai-artificial-intelligence/887309/openai-anthropic-dod-military-pentagon-contract-sam-altman-hegseth). Disney seems like it wants to cut its losses by distancing itself from OpenAI, which makes sense, but that move only highlights how ridiculous it was for D’Amaro to spearhead the collaboration in the first place. [](https://platform.theverge.com/wp-content/uploads/sites/2/2025/12/disney-openai-sora.jpg?quality=90&strip=all&crop=0,0,100,100) Disney-provided examples of its characters in Sora AI content. Image: Disney You don’t need a background in corporate leadership to understand how ridiculous Disney’s plan to _pay_ OpenAI $1 billion so that Sora could churn out slop featuring some of the studio’s characters was. Disney appears to have figured that out now, and late is better than never, but the OpenAI deal falling apart is going to make any future AI plans the company announces feel like they might be just as misguided and doomed to fail the same way. While the Epic layoffs haven’t been attributed to anything Disney-related, the sheer number of people who just lost their jobs gives us some insight into how things are changing at the company. Like [every other live-service game](/column/893294/live-service-games-mess), _Fortnite_ has been struggling to keep its momentum going, and in-game currency price hikes could only do so much to offset [lower player engagement and higher operating costs](/games/900389/live-service-games-mess-fortnite-layoffs). Epic CEO Tim Sweeney told staffers that the layoffs and $500 million reduction in spending will put the company “in a more stable place,” which might be true, but it raises some questions about how the Disney partnership is being prioritized. Last week, [Epic announced](/games/897163/fortnite-star-wars-creators-uefn-epic-games-disney) that _Fortnite_ creators will soon be able to build _Star Wars_ -themed games on the platform. That was the first bit of concrete news about the Epic / Disney collaboration the company shared since releasing a batch of Disney-focused minigames last fall. But what we haven’t heard about or seen is the ambitious “persistent universe” the two companies planned to build together as part of [Disney’s $1.5 billion investment in Epic back in 2024](/2024/2/7/24065281/disney-epic-games-investment-fortnite-metaverse). While _Fortnite_ isn’t going away anytime soon, its struggles as one of the biggest online games in the world don’t bode well for the idea of a Disney-branded metaverse, which would be competing in the most cut throat segment of the games industry. And now Epic will be building it with a significantly smaller team. With both the Sora and Epic deals, Disney was clearly trying to get ahead of the game by making a big bet on the future through investments in AI and the metaverse. But in a single day that future looks much less certain — which means Disney may have made a pair of very expensive mistakes. **Follow topics and authors** from this story to see more like this in your personalized homepage feed and to receive email updates. * Charles Pulliam-Moore * AI * Analysis * Disney * Entertainment * Fortnite * Gaming * OpenAI * Report * Streaming