The unnamed startup is developing AI video technology aimed at film production and wants deep access to Sora — enough to substantially modify and improve the model, then sell software and services built on it to studios.
The Information's source says it remains unclear whether OpenAI will also hand over Sora's model weights, the parameter values that shape how the model responds, but even without them the startup would gain enough access to reshape the system for professional use.
If a deal is reached, OpenAI would receive an equity stake in the startup, the size of which has not been confirmed.
A Hollywood reunion with Sora's architects
The startup's founding team reads like a bridge between Hollywood and AI research. It was founded months ago by Jeffrey Katzenberg, the former Walt Disney Studios chairman who co-founded DreamWorks; Bill Peebles, the former OpenAI researcher who led Sora's development; and Sujay Jaswa, the former chief financial officer of Dropbox.
Katzenberg and Jaswa are also co-founders of the technology investment firm WndrCo.
The company first surfaced in reporting on September 9, when reports indicated it planned to train its own video models and was discussing significant funding with investors, including Andreessen Horowitz.
Now the founders appear to be aiming for a ready-made shortcut: acquiring Sora itself rather than starting from scratch.
Peebles' involvement may matter more than any paperwork. The Information noted that while AI developers usually guard their model weights closely, sharing them would be unsurprising here — Peebles already knows Sora's architecture and training methods from the inside.
From consumer novelty to studio tool
OpenAI introduced Sora to wide acclaim, but began winding down its video AI efforts earlier this year as part of a broader cutback of side projects.
The company shut Sora's consumer-facing platform and web interface to free up computing power and concentrate on its core enterprise AI business as it readies for a stock market listing.
The retreat also scuttled a reported $1 billion content deal with Disney.
The talks signal where the economics of AI video have shifted. If Sora returns, it will not be as the consumer product people once tried out of curiosity — it will be a behind-the-scenes tool for professionals who want to make productions faster and cheaper.
Hollywood's uneasy embrace of AI video
Studios have been experimenting for years. Lionsgate signed a 2024 deal with Runway covering around 20,000 of its intellectual properties, saying at the time it expected to save "millions and millions of dollars" on AI-assisted productions.
Netflix's series El Eternauta was reportedly made ten times faster using AI tools than with conventional effects, and AI video apps — many of them Chinese — have spread rapidly with consumers.
But the industry remains divided. Studio Ghibli co-founder Hayao Miyazaki has called AI-generated animation "an insult to life itself," AI protections were a central issue in the recent Hollywood strikes, and questions about which licensed works train these models are still unresolved.
Disney sent Google a cease-and-desist letter over training on its works before signing its own AI content deal with OpenAI.
No deal between OpenAI and the Katzenberg startup has been closed, and the startup's name has not been disclosed. If the talks succeed, Sora's most famous chapter — the consumer craze — may end up being just a prologue to its real job in Hollywood.
