Netflix Goes ‘All In’ on Generative AI Despite Industry Divide

Netflix has officially embraced generative AI, signaling a bold step into the future of filmmaking as Hollywood remains divided over the technology’s impact on creativity and jobs. In its latest quarterly earnings report, Netflix declared it is “very well positioned to effectively leverage ongoing advances in AI,” emphasizing innovation while reassuring that storytelling remains a human art.

The entertainment industry has been grappling with the ethical and creative implications of AI since OpenAI’s Sora 2 release reignited fears of deepfakes and job losses. With major studios experimenting cautiously, Netflix’s proactive stance could set a new industry precedent.

Netflix CEO Ted Sarandos reaffirmed the company’s balanced approach, saying,

“AI can give creatives better tools to enhance their overall TV/movie experience for our members, but it doesn’t automatically make you a great storyteller if you’re not.”

The streaming giant has already tested AI tools in production  using generative AI in Argentina’s The Eternaut to simulate a building collapse, while Happy Gilmore 2 applied AI for age-regression effects, and Billionaires’ Bunker used it for pre-production design work.

Sarandos added,

“We’re confident AI will help our creative partners tell stories better, faster, and in new ways. We’re all in on that, but we’re not chasing novelty for novelty’s sake.”

Despite skepticism within Hollywood, Netflix appears focused on using AI for behind-the-scenes work  visual effects, set design, and production efficiency  rather than replacing actors or writers. This stance comes as SAG-AFTRA and stars like Bryan Cranston call for tighter guardrails against unauthorized deepfakes.

The move comes amid Netflix’s 17% year-over-year revenue growth, reaching $11.5 billion, slightly below its forecast. Analysts believe Netflix’s investment in generative AI could reduce long-term production costs and enhance creative output.

As the debate intensifies, Netflix’s strategy highlights a broader industry shift  from fearing AI’s role in entertainment to finding practical ways to harness it responsibly.