Generative AI is changing the game in Hollywood

Generative AI is transforming how movies are made—reshaping writing, acting, effects, and distribution. The film industry may never be the same. (CREDIT: CC BY-SA 4.0)

Key Takeaways

Generative AI is changing every part of filmmaking, from writing and acting to effects and global distribution.
AI tools allow faster, cheaper content creation, empowering both studios and independent creators to reach more viewers.
Hollywood faces a global race and ethical questions as AI reshapes storytelling, economics, and creative control.

Hollywood stands on the edge of a transformation driven by generative artificial intelligence. Over the next five years, this technology is expected to reshape filmmaking—from writing and acting to marketing and distribution. Facing rising costs, global competition, and changing audience habits, studios are turning to AI to create more efficiently and reach viewers in new ways.

Film production has always been a complex and expensive process. Traditional methods involve multiple stages, including scriptwriting, casting, filming, and post-production. Each of these steps demands time, money, and coordination among large teams. Blockbusters like Avatar: The Way of Water and Avengers: Endgame required years of work and hundreds of millions of dollars, especially for visual effects. Post-production alone can exceed $100 million, due to the sheer scale of digital artistry involved.

Films like Avatar: The Way of Water involved thousands of artists working for years on digital environments and effects to bring their worlds to life. (CREDIT: 20th Century Fox Studios)

Marketing is just as costly. Studios can spend up to $200 million promoting a single release. Whether through traditional theaters or digital streaming platforms, the challenge is the same: capture audience attention and maximize returns. AI tools are now being used to address these high costs and help studios work faster and smarter.

Advertising campaigns face similar hurdles. Big brands invest heavily in actors, sets, and post-production. Generative AI offers an alternative—virtual actors, AI-designed sets, and synthetic soundscapes that reduce costs and speed up production timelines. Companies can now create global ads without ever flying a crew across the world.

Scriptwriting Powered by Algorithms

One of the most exciting uses of AI in Hollywood is story development. Advanced tools from companies like OpenAI and DeepMind are already being used to create detailed storylines and scripts. These systems can learn from thousands of existing screenplays and generate stories that feel original yet familiar. AI researcher Ross Goodwin has shown that these tools can help predict which plot elements are more likely to connect with viewers.

The Rise of Virtual Actors and AI Performers

AI is not just changing how stories are written—it’s also reshaping who appears on screen. At this year’s CES tech expo, DeepVox showcased virtual actors that look and behave almost like real humans. These AI performers can speak, emote, and even improvise.

By using AI-generated actors, studios can avoid scheduling conflicts, save on contract costs, and resurrect famous faces from the past. For example, filmmakers might bring back a younger version of an older star or preserve the image of a deceased actor. This approach is gaining popularity, even as it raises ethical questions.

Actors’ unions like SAG-AFTRA have voiced concerns. They want clear rules about how AI is used and to ensure that human creativity remains central. Meanwhile, the U.S. Copyright Office has issued new guidance: fully AI-generated works without human involvement can’t be copyrighted. However, if a human guides the creative process or edits the final result, the work can qualify for copyright protection. This rule may shape how studios use AI going forward.

Fade Out, a short film made with Google’s Veo 2 (beta). It focuses on an aging rock star’s final years. Focused on film-like details—camera moves, lighting, textures, emotion—to craft a story, not just a montage. (CREDIT: Secret Level)

The debate over rights and originality continues. Artists and writers worry that AI might steal their style or replace their jobs. The challenge for Hollywood will be to strike a balance—using AI to boost creativity without undermining the people who bring stories to life.

Filmmaker Jason Zada recently demonstrated the future of AI filmmaking with The Heist. Using Google’s Veo 2, he created an entire short film from text prompts. No special effects or color corrections were added. Everything on screen came directly from the AI. The gritty, 1980s New York look was achieved entirely through generations of machine-produced imagery. All editing, music, and sound design were done by Zada, proving that a small team can now produce cinematic content that once required an entire studio.

Streaming Wars and the New Gatekeepers

As filmmaking becomes easier with AI, the next battleground may be distribution. According to media analyst Doug Shapiro, author of The Mediator newsletter, “When one input becomes more abundant, what becomes more scarce?” His answer: audience attention.

The Heist — Directed by Jason Zada. Every shot of this film was done via text-to video with Google Veo 2. It took thousands of generations to get the final film. (CREDIT: Secret Level)

Even if anyone can now make a movie, only a few companies control the platforms where people watch them. These “curators” include tech giants like YouTube, TikTok, and Netflix. They hold the keys to discovery, and their influence is growing. In many ways, owning the audience may soon be more valuable than owning the content.

The platform companies are not just distributors—they also build the tools creators use. This gives them a powerful edge. Shapiro believes we’re nearing a moment when a low-budget, AI-powered movie made by a small team becomes a massive success. That will push major studios to catch up fast, just like they did after Pixar’s Toy Story launched the CGI era.

TikTok and YouTube may soon be filled with scripted shows, not just cat videos and dance trends. As quality improves, independent creators could challenge the dominance of traditional studios, leading to a surge of new content from around the world.

Shapiro sees this as a creative explosion rather than a collapse. “GenAI won’t eliminate human creativity—it will democratize it,” he says. Instead of a few voices shaping culture, many more people will be able to share their vision.

‘Dear Dad’, a short film created by @secret____level over the holidays with a talented team of artists. This collaborative and iterative project came together in just a few weeks, showcasing the magic of animation and the power of our generative AI pipeline. (CREDIT: Secret Level)

Global Growth and a Race for AI Dominance

The AI revolution in film isn’t limited to the United States. International studios are moving quickly. The UK-based AiMation Studios recently released Where the Robots Grow, a full-length film created with generative AI and motion capture. It’s one of the first of its kind.

In Asia, the pace is even faster. Tencent and Baidu in China are investing heavily in AI-generated movies. These films can be produced in a matter of weeks instead of years. India’s film industry is using AI to dub films in dozens of languages and even develop virtual versions of popular actors.

This global expansion is sparking an AI arms race. U.S. studios like Disney and Warner Bros. are now building their own AI tools to stay competitive. They know that falling behind could mean losing market share—not just in America, but worldwide.

Politics may also play a role. With rising tensions between the U.S. and China, studios might face limits on using foreign AI systems. Meanwhile, European countries are introducing strict rules on ethical AI use, adding another layer of complexity.

The goal for Hollywood will be to stay ahead while keeping its creative soul intact. Studios must decide how far they’re willing to go to embrace AI—and how to protect the human heart of storytelling.

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