Jeffrey Katzenberg Teams Up with Former OpenAI Sora Head on New AI Video Startup

Hollywood mogul Jeffrey Katzenberg is teaming up with the former head of OpenAI’s Sora app to launch a new AI startup that would train its own video models and try to win over filmmakers, people familiar with the matter said.

The founders have been talking to potential investors including Andreessen Horowitz about raising significant funding for the new company, the people said.

Bill Peebles, the former OpenAI video researcher, would start the company with Katzenberg, former co-founder of DreamWorks and CEO of DreamWorks Animation, and Sujay Jaswa, former CFO of Dropbox. Katzenberg and Jaswa now run Wndr, a tech investment firm that also incubates companies.

The new company, whose name couldn’t be learned, would be Katzenberg’s most ambitious venture since Quibi, a short-form video app that raised $1.75 billion before folding in 2020. The company would develop new video models as some major AI companies like OpenAI pull back on AI for video initiatives in the U.S. while Chinese firms like ByteDance plow ahead but face significant copyright problems.

OpenAI shut down Sora, which briefly hit No. 1 on Apple’s app store, earlier this year due to its high costs and computing needs and the company’s desire to focus on other business-related products. Peebles left the company soon after.

Among other AI giants, Google and Meta Platforms have announced new video models this year. And AI startups in the U.S. have raised hundreds of millions of dollars in funding to build video-generating AI models. These include Runway, last valued at $5.3 billion, and Higgsfield, last valued at $5.4 billion.

Higgsfield focuses more on individual creators and businesses, though, and largely sells access to third party models, including Seedance, though it also offers its own family of AI video models called Soul. Runway does work with some Hollywood studios including Paramount and Lionsgate, but it also sells its models to ad agencies, retail brands and individual creators.

ByteDance’s Seedance model, meanwhile, has recently touted major improvements in its video-generating capabilities. However, the company put its release on pause in March due to a string of copyright disputes with major Hollywood studios and streaming platforms before eventually releasing it globally to countries excluding the U.S.

Wndr, launched in 2016, has invested in dozens of companies including Databricks and Waymo, and has helped build startups in fields ranging from cybersecurity to longevity.

Katzenberg’s creative credentials—before launching DreamWorks with Steven Spielberg and David Geffen, he headed Walt Disney Studios—could help the new company gain traction with an entertainment industry that has been ambivalent about AI. Some studio executives and filmmakers have embraced the idea of AI-generated video—Walt Disney Co. had an investment and licensing deal with OpenAI before Sora’s demise. But others have raised serious concerns that AI could inhibit creativity, displace talent and steamroll intellectual property protections.