In an article posted on the game's official website, the studio has explained that it's "made the difficult decision to discontinue live support for Dreams after September 1, 2023 to shift our focus to an exciting new project".
Players will still be able to play, create and share content on the game after September 1, but it will be receiving no further updates after this date.
The game will also be migrating to a new server in late May, at which point players will be given a storage limit of 5GB for their creations.
https://www.videogameschronicle.com/news/media-molecule-is-ending-support-for-dreams-in-september/