Hollywood’s AI adoption accelerates as Netflix embraces generative video for production workflows, while Disney remains cautious.

Netflix Inc. has begun using artificial intelligence video generation software from New York-based startup Runway AI, marking a significant step in integrating AI into mainstream content production. According to a person familiar with the matter, the streaming giant is applying Runway’s technology to speed up and reduce the costs of certain creative processes — particularly in special effects — as part of its broader push to harness AI.

While Netflix declined to comment, co-CEO Ted Sarandos confirmed during the company’s Q2 earnings call that AI is already being deployed in content creation. “We’re creating special effects shots more quickly and cheaply than we could with traditional VFX tools,” Sarandos said, citing the example of a collapsing building scene in the Argentine series El Eternaut. However, sources clarified that Runway’s software was not used for that particular sequence.

Disney Takes a Cautious Approach

Walt Disney Co. has also been testing Runway’s technology and exploring possible applications for its generative AI capabilities, according to people familiar with the discussions. But for now, Disney says it has no plans to integrate the software into its official production pipeline. The entertainment giant is treading carefully — partly due to the ongoing concerns in Hollywood about AI’s impact on creative jobs, as well as Disney’s own legal battles, such as its recent copyright infringement lawsuit against AI image and video startup Midjourney.

Runway’s Rise in Hollywood

Founded in 2018, Runway burst onto the scene in early 2023 with an AI model that could generate short, three-second video clips from text prompts. While those early results were rudimentary, the technology has since advanced rapidly. Runway has:

• Struck a deal with Lionsgate to train AI models on the studio’s content for use in film projects
  
• Expanded into animation and VFX, including launching its Act-Two model to simplify motion capture by mapping human movements onto animated characters
  
• Raised $545 million from investors, with a $308 million funding round earlier this year valuing it at over $3 billion
  

Runway competes in a crowded space that includes OpenAI, Google, and a growing roster of AI startups. Still, it enjoys a unique foothold in Hollywood, having secured tangible partnerships and production use cases where rivals are still seeking major deals.

The Bigger Picture

AI video tools like Runway’s offer Hollywood the promise of lower costs and faster turnaround times — but also raise difficult questions about intellectual property, job displacement, and artistic authenticity.

For now, Netflix’s embrace of AI and Disney’s cautious experimentation underscore a larger industry trend: the AI revolution in entertainment is not a question of if, but how fast it will happen.