Sora was burning $15 million a day. It still got cut.
OpenAI shut down Sora. Google compressed AI memory 6x. Meta bet $135B on infrastructure. Encryption has until 2029.
The technology is no longer the hard part. What survives now is decided by economics, and soon, by physics.
This Week at a Glance
OpenAI shut down Sora this week, ending a $1 billion Disney deal that would have brought 200+ characters into AI-generated content. The app peaked at 6 million users before engagement dropped sharply.
The economics never worked. Sora burned roughly $15 million per day in inference while generating $2.1 million in lifetime revenue. Resources shift to coding tools, agents, and a new productivity model internally called "Spud."
Capability alone isn't enough. Even the most advanced product needs economics to survive.
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Source: PetaPixel / Tech Between the Lines
Google's 6x Memory Compression Spooked the Chip Market
Google Research released TurboQuant — cutting the KV cache from 16 bits to roughly 3 bits per value. Result: 6x less memory, inference up to 8x faster, no accuracy loss. Memory hardware stocks (Micron, Samsung, SK Hynix) dropped the same afternoon. Cloudflare's CEO called it Google's DeepSeek moment.
The same day, Apple announced Siri will open to rival AI assistants in iOS 27, ending OpenAI's exclusive deal. Google's Gemini 3.1 Flash Live is now live across 200+ countries. One bet says the best model wins. The other says the device does.
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Source: Google Research
Ads Have Officially Entered the ChatGPT
OpenAI began testing display ads in ChatGPT this week. The format looks like standard Google-style banners — which landed with a thud. One Reddit thread summed it up: "They have Sora assets just sitting there." People expected something generative. What they got was a display unit.
It's OpenAI's first move toward revenue beyond subscriptions, at a moment when inference costs are high and Sora just got cut. Whether it works depends on something still unproven: that ChatGPT's users will stay through an ad experience.
Source: Reddit
Meta Bets $135 Billion That Infrastructure Wins
Meta is tying senior executive pay to a $9 trillion valuation target. The lowest tier requires roughly 88% stock growth. The highest requires a 6x jump. The package covers CTO Andrew Bosworth and CPO Chris Cox — not Zuckerberg.
Capital expenditure for 2026 is projected at up to $135 billion, mostly data centers and AI infrastructure. Meta is not hedging.
Source: Yahoo Finance
Your Encryption Has Until 2029. Clear Your Schedule.
Google revised its Q Day estimate to 2029 — the year quantum computers become capable of cracking RSA and elliptic curve encryption, which currently protect most of the internet. Google is urging the entire industry to begin migrating now.
Enterprises and governments that haven't started moving to post-quantum cryptography are already behind. Four years is not a lot of runway to rebuild the padlock on everything.
Quick Hits
Builds autonomous flight software for military aircraft — no GPS, no communications required. One of the largest AI-defense rounds on record. Read more
Ex-DeepMind engineers raising $2.5B with Nvidia backing. Building localized AI for individual countries, including a deal in South Korea for Korean-language infrastructure. Read more
Voxtral, built on Ministral 3B, is open-source and edge-optimized. Reportedly beat ElevenLabs in blind preference tests. Read more
20+ integrations including Figma, Notion, Slack, Gmail — building agentic workflows into the dev environment. The pivot from consumer entertainment to developer tooling is explicit. Read more
Raising $250–300M at a $2B target. Founded by Robinhood co-founder Baiju Bhatt. The pitch: move compute to space to sidestep AI's energy and land constraints. Read more
Worth Reading
Artificial Intelligence: A Guide for Thinking Humans
Melanie Mitchell · Penguin
Possibly the clearest book on what AI actually is, written for people who want to understand the field without hype in either direction. Good antidote to a week like this one.
Week Takeaway
Sora had the users. It had the Disney deal. It still got cut. The filter being applied right now isn't "is this technically impressive" it's "can this pay for itself." A few more products are probably in line for that same question.
See you next week.