Two years after Sora’s splashy debut and subsequent fizzle, AI video has quietly become a real business. The clearest signal: Higgsfield, founded by former Snap executive Alex Mashrabov, just raised $400 million at a $5.4 billion valuation. That’s a fourfold jump from its $1.3 billion valuation eight months earlier, with annualized revenue rocketing from $20 million to $700 million in a year. Investors now include DST Global, Goldman Sachs, Liberty Global, and Intel. The customer mix tells the real story — business clients went from under a quarter of revenue in January to the majority now. Dollar Shave Club reportedly produces several marketing videos daily on the platform, replacing what used to be a single campaign video.
Hollywood is feeling the shift too, though more cautiously. In Culver City, the AI studio Promise is filming a horror movie called “Touch Grass” on what amounts to white sheets in an office corner. Actress Tori Thomas acts out a chase scene while Chinese model Seedance 2.5 generates a swaying grass field in real time behind her. Co-founder George Strompolos, backed by Google and Disney, estimates hybrid AI-human productions run 20 to 50 percent cheaper than conventional films. Netflix says 300 of its 1,000 titles will involve AI by 2026. Ron Howard is working with AI studio Obsidian on an animated documentary, with savings pegged at 30 to 40 percent.
Then there’s the synthetic talent pipeline. Inception Point AI manages over 100 AI personas, each with a 15- to 30-page “character bible” — fictionalized backstories designed to make digital personalities feel relatable. The company runs more than 5,000 active podcasts, and CEO Jeanine Wright says just 20 listeners per episode turns a profit. AI models are landing fashion deals with brands like Guess, and AI music avatars like Xania Monet are charting on Billboard. Spotify plans to introduce an “AI Persona” label.
Sora’s trajectory remains the cautionary tale. OpenAI’s early 2024 demos terrified Hollywood, but the public release disappointed, and a billion-dollar Disney deal collapsed. The standalone Sora 2 app launched in fall 2025 and was eventually discontinued. Meanwhile, competitors — especially Chinese firms — filled the gap. The lesson is blunt: raw model demos don’t build industries. Production tools, marketing platforms, and persona factories do. OpenAI had the technology lead and lost it by hesitating, while companies like Higgsfield turned practical applications into billions. The market didn’t die after Sora’s false start. It just moved to people who actually ship.
