Hollywood shifts from AI skepticism to selective adoption

Hollywood spent the early years of generative AI on the defensive. Studios feared intellectual-property misuse, while actors worried they would become little more than raw material for AI systems—a concern that became central to the 2023 strike. Early experiments also exposed the technology’s limits, from six-fingered hands to poorly synchronized mouths.

That caution is now giving way to selective adoption. In early March, Netflix bought InterPositive, an AI platform for film and TV production co-founded in 2022 by producer, director and actor Ben Affleck. The company had fewer than 20 employees, but Netflix paid $587 million.

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In early June, Lionsgate took a stake in Runway, one of the leading AI-generated-video companies, and agreed to develop creative projects with it. Days later, Google made a similar move by investing in independent studio A24.

Recent advertising campaigns and short films suggest AI video has crossed a quality threshold, including in scenes with human characters.

“In many cases, if the story is strong enough, the technology is now good enough to become invisible.”

Runway chief creative officer Jamie Umpherson said creators are becoming more capable with the tools as the technology improves on a “scale that was unimaginable a couple of years ago.” Greater familiarity, he added, is allowing creative teams to focus more on story and style.

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How studios are using AI in production

Netflix co-CEO Ted Sarandos said in mid-July that generative-AI workflows had been used on roughly 300 Netflix titles, mostly in post-production. The company is applying the technology to “really complicated shots and sequences,” he said.

“We’re making higher-quality output more quickly and efficiently than we could have using traditional methods.”

The company appears focused mainly on the edges of production: visualizing concepts before filming and color-grading footage after production wraps.

Independent director and producer Jon Erwin said the central relationship among actor, director and camera remains intact. His production company, Wonder Project, launched the joint venture Innovative Dreams with Luma in April. The partners have developed a process that films actors naturally—without green screens or motion-capture suits—then places them inside a hyper-realistic AI-generated world.

Erwin calls the approach “hybrid” or “nonlinear” filmmaking. The AI backdrop can be added just minutes after a scene is shot, allowing filmmakers to preview the result and capture additional takes immediately if necessary.

The first feature using the process, “Young Washington,” has grossed more than $40 million—double its production budget. It stars Oscar winner Ben Kingsley alongside two Golden Globe winners.

Traditional studios remain cautious

Technicians, actors and camera operators still have roles in this emerging production model, but the number of people required remains uncertain. Actor Matt Damon, discussing Christopher Nolan’s “The Odyssey,” which was shot across three continents, warned that large-scale productions may become harder to finance.

“I don’t think people are going to be given the resources to shoot movies that way for much longer.”

Paramount, Universal, Sony, Walt Disney and Warner Bros. have officially remained on the sidelines so far. Tanya Porquez, CEO of Generated Group, which has launched a database of AI-generated video creations, expects that position to change.

“Studios will have to get on board. Not because they necessarily want to, but I think it’s just the wave.”