Adobe shares tumbled Friday after high-profile artificial intelligence startup OpenAI introduced a new text-to-video generator. ADBE stock plunged more than 7% on the news.
San Francisco-based OpenAI on Thursday introduced Sora, which can create lifelike videos from simple text descriptions. Earlier OpenAI services can create written articles and images from basic prompts.
Sora is able to generate complex video scenes with multiple characters, specific types of motion, and accurate details of the subject and background, the company said. It currently can generate videos up to a minute long. But Sora is still in testing and not yet available for public use.
"Sora serves as a foundation for models that can understand and simulate the real world, a capability we believe will be an important milestone for achieving AGI (artificial general intelligence)," OpenAI said on its website.
ADBE Stock Drops On Sora Debut
OpenAI's Sora will provide competition for Adobe's Creative Cloud suite of products for creative professionals.
OpenAI Chief Executive Sam Altman promoted Sora on social media platform X, formerly Twitter, late Thursday. He posted a number of sample videos created with Sora, such as "Two golden retrievers podcasting on top of a mountain."
On the stock market today, ADBE stock fell 7.4% to close at 546.66.
With the move lower, ADBE stock undercut the low of a flat base it had recently formed, according to IBD MarketSmith charts. In another negative sign, it dropped well below its 50-day moving average line.
ADBE stock is on the IBD Tech Leaders list.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
