Netflix goes all-in on generative AI for filmmaking

While the rest of Hollywood is still locked in fierce arguments over copyright and picket lines, Netflix is making its position loud and clear: it is going all in on generative AI.

In its quarterly letter to investors, the streaming giant stated it is very well positioned to ride the ongoing wave of AI advancements. On the earnings call, co-CEO Ted Sarandos doubled down, saying the company is fully leaning into the technology to help creative partners tell stories better and faster.

From pre-production sketches to final cuts

Netflix is not talking about vague future experiments. The technology is already ending up in final edits.

Earlier this year, the streamer used generative AI in final footage for the first time in the Argentine series The Eternaut to render a scene of a building collapsing.

Since then, adoption has picked up steam behind the scenes. Filmmakers behind Happy Gilmore 2 tapped generative AI to de-age characters for an opening sequence. Meanwhile, producers on Billionaires' Bunker used it during pre-production to explore wardrobe and set designs.

Sarandos was careful to draw a line, however. He made sure to tell investors that Netflix does not view generative AI as the backbone of storytelling, but rather as an efficiency engine. In his words, it takes a great artist to make something great, and AI will not magically turn someone into a master storyteller.

The deepfake debate and backstage anxiety

This aggressive push comes at a delicate time for entertainment.

OpenAI recently released its Sora 2 video and audio generation model without guardrails preventing users from generating likenesses of public figures. That prompted pushback just this week from the SAG-AFTRA actors union and Bryan Cranston, who demanded stricter rules against unauthorized digital replicas.

When asked whether Sora poses an existential threat to Netflix, Sarandos brushed off the concern. He suggested short-form content creators might feel the heat, but insisted he is not worried about AI replacing high-end film and television creativity.

Financially, Netflix reported a 17% jump in quarterly revenue to $11.5 billion, although that figure slightly missed internal company forecasts.

Why it matters

We think Netflix is executing a very deliberate, calculated playbook here.

By keeping AI strictly behind the camera—focusing on VFX shots, de-aging, and pre-production concepts—Netflix avoids the explosive PR minefield of trying to replace on-screen talent with digital avatars. For creators, this means expensive visual techniques that once required multi-million-dollar budgets are suddenly becoming accessible utility tools.

However, this approach highlights a glaring double standard in the entertainment business. While high-profile actors and guild writers have fought for strict contractual protections, backstage visual effects artists and concept illustrators have far less leverage.

By openly treating generative AI as a tool to streamline visual production, Netflix is effectively signaling to rival studios that the era of treating AI as taboo is over. Now that the biggest buyer in entertainment has normalized AI-generated shots in finished releases, expect every competing studio to quietly ramp up their own behind-the-scenes pipelines to slash production budgets.