Netflix has officially declared generative artificial intelligence a core production tool, announcing its complete commitment to AI technologies during Tuesday’s third-quarter earnings call. The move comes as Hollywood remains sharply divided over how this technology should fit into entertainment industry workflows.

CEO Ted Sarandos framed AI as an enhancement to human creativity rather than a replacement for it. “It takes a great artist to make something great,” Sarandos said. “AI can give creators better tools to enhance the overall experience of TV shows and films for our subscribers, but it won’t automatically make you a great storyteller if you aren’t one already.”

The streaming giant has already deployed generative AI across multiple productions. Recent projects include creating a building collapse sequence in the Argentine series “The Eternaut,” de-aging characters in “Happy Gilmore 2,” and supporting visualization work during pre-production on “Billionaires’ Bunker.”

Growing Tensions Over AI Implementation in Hollywood

Netflix’s aggressive AI adoption arrives amid escalating pressure from Hollywood unions and performers on artificial intelligence companies. The controversy intensified following OpenAI’s recent launch of Sora 2, a powerful video generation tool that sparked concerns about unauthorized use of performer likenesses.

Just days before Netflix’s announcement, Bryan Cranston and SAG-AFTRA successfully secured stronger deepfake protections from OpenAI after videos appeared showing historical figures and deceased celebrities in fabricated scenarios.

The timing highlights the entertainment industry’s split approach to artificial intelligence. While Netflix reported revenue growth of 17% to $11.5 billion and positioned AI as necessary infrastructure for scaling global content production, many in Hollywood worry about job displacement and unauthorized use of creative work. SAG-AFTRA President Sean Astin emphasized that “we’re concerned with the human, not the synthetic,” reflecting widespread industry skepticism.

How Netflix is Actually Using AI in Production

Netflix executives outlined their AI strategy around measurable productivity improvements rather than creative replacement. The company provided specific metrics for cost and time savings, noting that AI-generated effects in “The Eternaut” were completed roughly ten times faster than traditional visual effects methods would have required.

Sarandos drew parallels to the music industry, pointing to Taylor Swift’s enduring popularity despite widespread AI-generated music as evidence that great artists will remain irreplaceable. The argument suggests that while AI tools may proliferate, audiences will continue gravitating toward human artistry and authentic creative voices.

The streaming platform plans to expand AI integration across pre-visualization, visual effects, localization, and advertising while maintaining human oversight. Netflix requires audits of AI-generated content from its suppliers, suggesting the company recognizes potential quality and ethical concerns that come with automated production tools.

Infrastructure vs Innovation: Netflix’s Long-Term Bet

As Netflix scales its global content portfolio, the company views AI as critical infrastructure rather than a creative novelty. The platform’s bet hinges on enhanced tools helping creators “tell stories better, faster, and in new ways” without diminishing the human element that audiences value.

This approach differs markedly from concerns raised by industry professionals who see generative AI as a threat to livelihoods. The contrast between Netflix’s optimistic framing and union skepticism reveals fundamental disagreements about who benefits from AI-driven efficiency gains.

Large language models and reinforcement learning from human feedback continue advancing at rapid pace, forcing entertainment companies to decide how deeply to integrate these technologies. Netflix appears committed to being an early adopter rather than waiting for industry consensus.

What This Means for Content Creators and Workers

The practical implications of Netflix’s AI commitment extend beyond the streaming service itself. As one of Hollywood’s largest content buyers and producers, Netflix’s technological choices influence industry standards and expectations. When the platform demonstrates dramatic time and cost savings from AI tools, pressure mounts on competing studios and independent productions to adopt similar approaches.

For artists and technical workers, the announcement reinforces existing anxieties about job security in an AI-augmented production environment. While Sarandos insists that great storytelling still requires great storytellers, questions remain about how many traditional roles will shrink or disappear as AI handles tasks previously done by human crews.

The entertainment industry now faces a defining moment similar to what the music industry experienced with digital production tools and streaming distribution. Whether Netflix’s vision of AI as creative enhancement rather than replacement proves accurate will depend largely on how the technology evolves and how aggressively companies deploy it across production workflows.