AI Entertainment Studios: The New Breed of Companies Pioneering Gen AI-Powered Production

A growing number of independent entertainment studios are emerging with a capability Hollywood has never seen: generative artificial intelligence at the core of their creative DNA.

These studios include several primarily focused on producing feature-length and short narrative film and TV content, including Promise, the recently announced venture backed up Peter Chernin and Andreessen Horowitz; Asteria Film, owned by documentary studio XTR after acquiring the AI animation studio Late Night Labs; TCL Studios, owned by the U.S. division of the Chinese electronics giant; U.K.-based Pigeon Shrine, and creators of original animated IP made for YouTube and social media, including Toonstar and Invisible Universe.

Rather than taking a cautious or stymied “wait and see” approach that some perceived among legacy studios in Hollywood, AI studios are proactively bringing generative AI tools and models into their processes and designing production workflows and pipelines around them. They aim to deeply understand the technology and rigorously push the tools to discover what they’re capable of, how they’re limited and how best to use them to produce high-quality, compelling content, as opposed to more AI slop.

But exactly what it means to be an AI studio is less clear and begs deeper questions about how generative AI is being used in a professional workflow for content production.

VIP+ spoke to leaders at seven such studios to provide an in-depth exploration of studios’ different approaches to generative AI tools, production workflows, pipelines and teams.

Two main strategic philosophies guide these companies:

Aggressive experimentation: Multiple sources referred to the present moment as the “wild West,” as no one knows yet how this technology will be applied to filmmaking. Rather, it needs to be uncovered through purposeful trial and error by actually working with the tools to try and create content.

Several view their teams as on the leading edge of the next wave of production technology in the industry, already far ahead of major studios and VFX studios in their facility with gen AI in production thanks to their serious efforts to experiment and stay on top of constant tool and feature changes. They described their teams having “breakthroughs” during production that could only be achieved by creative storytelling and technical expert teams confronting and solving actual creative problems.

“Production breakthroughs really happen through being driven by creative,” said Paul Trillo, an AI director and filmmaker now collaborating with Asteria Film. “That’s why ILM is what it is. They had to brute-force figure out how. All of it is in service of some underlying story that is requesting something. And we’re like, all right, well, no one knows how to do that. Let’s figure that out.”

Several studios further referred to their nimbleness and adaptability as critical operating elements, given the rapid pace of AI advancement. With new models and tools constantly emerging, sources said their toolsets were being outmoded within weeks or months, followed by new features or tools launching that resolved yesterday’s production challenge.

That nimbleness has allowed them to evaluate and rapidly adjust toolsets in a workflow as needed, in some cases immediately integrating a new or updated tool if it improves on a different or earlier one or meets a specific creative need on a project. By contrast, legacy studio systems with established pipelines wouldn’t as easily permit sudden changes to tools.

Pursuit of efficiency: AI studios are interested in building workflows and pipelines that make good on the ability of gen AI tools to drive down content budgets, shrink production timelines, get quicker feedback (“fail faster”) and supercharge the output of their creative teams and artists, in some cases to meet the pace of certain distribution channels (e.g., social media).

Sources argued that content produced in the traditional Hollywood pipeline quite simply costs too much and takes too long to make. “In Hollywood, it’s very difficult to produce something affordably. We’re looking to basically compress those unit economics, both in terms of budget and timeline for creation,” said Jonathan Lutzky, COO at EDGLRD, a digital IP-based studio led by filmmaker Harmony Korine.

Some further argued that efficiency, thanks to AI power tools, might revive fallow projects during a period of contraction in Hollywood. “We’re building software and workflows that provide opportunities to be more efficient and bring down the time or cost it takes to make something,” said Bryn Mooser, CEO at Asteria. “We talk about how these tools can help filmmakers either make something they couldn’t have made before because the budget was too high or they didn’t have access to those kind of tools. Now the cost can come down to where they can independently finance.”

In addition to their facility with AI tools, studios view the strength of their talent teams as their true differentiator and X factor. Sources at AI studios described purposefully building their teams to bring together creative and tech expertise, including highly adept traditional artists, animators and producers with deep knowledge of storytelling, senior VFX specialists (e.g., CG generalists and compositors) and tech talent with deep knowledge of generative AI. Most important, sources highlighted that creatives and tech work directly alongside each other to problem-solve.

For example, AI tech talent can consist of engineers, who can function as the studio’s research and development arm, tracking new research and tools and showing it to creatives on the production side to assess how it might help solve a particular production issue. But it can also mean gen AI specialists who understand more advanced, technically “in the weeds” ways of using the tools.

Perhaps most salient to the industry right now, AI studios are hiring but arguably doing so from a limited pool of people.

“The kind of ‘dream team’ that we’re cobbling together as the core creative research team has people who have both [creative] backgrounds, whether directing, filmmaking, animation or VFX, and they know AI tools really intensely,” said Trillo. “You’d be surprised how few people have both sets of knowledge.”

“We’ve been trying to be home to some of the earliest and best makers in this space,” said Eric Shamlin, CEO at Secret Level. “We’re by no means alone. There are probably half a dozen shops that are in the competitive landscape now. All of us are trying to identify the best talent out there.”

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