Hollywood's quiet AI adoption sparks deals and lawsuits

In 2020, Warner Bros. decided to release its 2021 movie slate directly to streaming, prompting top talent to migrate. Today, Hollywood is turning to artificial intelligence to curb soaring production costs. Netflix recently acquired actor Ben Affleck's AI startup for $587 million, later announcing on an earnings call that 300 shows already utilize generative AI. Meanwhile, Google DeepMind made a $75 million investment into indie studio A24, and Lionsgate secured a stake in video-generation startup Runway. Amazon has also launched an AI generative studio led by executive Albert Chang. These moves come as traditional production costs balloon; Pixar struggles to produce original animated features for less than $200 million, and a film like Christopher Nolan's upcoming project The Odyssey would cost nearly $300 million, rather than $250 million, under typical studio budgets.

This shift has created friction between studio executives and creative talent. While some filmmakers embrace the tools, others remain deeply skeptical. Kane Parsons, director of the high-grossing A24 film Backrooms, expressed a desire to make generative AI disappear entirely. However, former DreamWorks chief Jeffrey Katzenberg previously predicted that AI could replace 80 percent or 90 percent of the workforce on animated films. Screenwriters also worry about models like ChatGPT or Grok scraping their work without consent, a fear highlighted when Aaron Sorkin tested ChatGPT's ability to write dialogue. The threat of digital piracy also looms, as a leaked version of The Odyssey recently racked up 1 million views on X before being taken down.

Labor unions like SAG-AFTRA and the Writers Guild are fighting to protect workers, establishing guardrails in negotiations during 2023 to ensure AI does not cause job losses. On the legal front, the industry is locked in intellectual property battles that experts say could take five to 10 years to resolve. Disney, Universal, and Warner Bros. have sued Midjourney for copyright infringement, while Anthropic recently agreed to a historic $1.5 billion settlement in a lawsuit brought by authors. To protect actors, organizations like RSL Media, cofounded by Cate Blanchett, have launched the Human Consent Registry to give performers control over their digital likenesses.