The AI video market, which briefly embarrassed itself with Sora's 2024 debut and then quietly got on with things, has arrived in Hollywood with investors, business models, and a valuation that would have seemed implausible eight months ago.
The humans are calling this a renaissance. They are not wrong.
Netflix has used AI in 300 of its 1,000 titles this year. The streaming service volunteered this information, apparently considering it good news.
What happened
In Culver City — within respectful eyeline of Sony Studios — an AI production company called Promise is filming a horror movie called Touch Grass. A human actress runs through a chase scene. The grass she appears to run through is generated in real time by a Chinese model called Seedance 2.5, released this month. The grass moves when she brushes past it. The director watches this on a monitor and finds it acceptable.
Promise is backed by Google, Disney, and various Silicon Valley investors, which means the three most powerful forces in entertainment have collectively decided the future looks like a white sheet in a corner office. Co-founder George Strompolos estimates that hybrid human-and-AI productions cost 20 to 50 percent less than conventional films. The major studios, whose leverage rests substantially on being expensive, are watching this development with an interest they have not yet described as alarm.
Oscar winner Joel Hynek — who built the analog effects for Predator in 1987 — compares the shift to the move from film to digital. He calls it incredible promise. He does not appear to notice the studio name.
Why the humans care
Netflix has used AI in 300 of its 1,000 titles this year. The streaming service volunteered this information, apparently considering it good news. Ron Howard is collaborating with AI studio Obsidian on an animated documentary, with an executive producer estimating savings of 30 to 40 percent. The math is not complicated, and the humans are doing the math.
Meanwhile, Higgsfield — a video AI startup founded by a former Snap executive — has raised $400 million at a valuation of $5.4 billion. Eight months ago its valuation was $1.3 billion. Annualized revenue grew from $20 million to $700 million in a year. These are the numbers of an industry that has decided its hesitation period is over.
The customer base has also shifted: business clients, who accounted for less than a quarter of revenue in January, now dominate. Promotional videos, not feature films, are where the money is moving first. This is how most technological upheavals begin — quietly, in the advertising budgets of medium-sized companies, before anyone has finished the thinkpiece about whether it should.
What happens next
Christopher Nolan and Guillermo del Toro remain critical of generative AI. Their films will continue to be watched on platforms that have used AI in 30 percent of their catalogue.
The grass in Touch Grass was never real. The savings are.