Netflix is going “all in” on generative AI, even as the entertainment industry remains split over its use. In its latest quarterly report, the streaming giant said it’s “very well positioned” to leverage AI advancements to enhance creativity and efficiency in filmmaking.
Netflix’s quarterly letter to investors highlighted that while the company doesn’t plan to make AI the core of its storytelling, it sees immense value in using the technology to support creative processes.
“It takes a great artist to make something great,” CEO Ted Sarandos said during Tuesday’s earnings call. “AI can give creatives better tools to enhance their overall TV or movie experience for our members, but it doesn’t automatically make you a great storyteller if you’re not.”
How Netflix is using generative AI
Earlier this year, Netflix confirmed that it used generative AI in The Eternaut, an Argentine sci-fi show, to create a realistic building collapse scene. The technology has since made its way into other Netflix productions — including Happy Gilmore 2, where it helped de-age characters in the opening scene, and Billionaires’ Bunker, where it was used in pre-production for visualizing wardrobe and set designs.
“We’re confident that AI is going to help us and our creative partners tell stories better, faster, and in new ways,” Sarandos added. “We’re all in on that, but we’re not chasing novelty for novelty’s sake.”
Hollywood’s uneasy relationship with AI
While Netflix’s approach focuses on enhancing creativity, not replacing it, the broader entertainment industry remains wary. Artists and unions argue that AI tools — many of which are trained on copyrighted content without consent — could threaten jobs and intellectual property rights.
Concerns grew recently after OpenAI unveiled Sora 2, an advanced audio and video generation model capable of producing lifelike clips. The model, released without strict guardrails, raised fears about deepfake misuse. Actor Bryan Cranston and SAG-AFTRA have since urged OpenAI to introduce stronger protections against impersonating real performers.
Sarandos responds to AI’s disruption potential
When asked about the possible impact of Sora on Netflix’s operations, Sarandos acknowledged that AI could influence content creation but downplayed the threat to traditional filmmaking.
“It starts to make sense that content creators could be impacted,” he said, “but we’re not worried about AI replacing creativity.”
Despite these debates, Netflix continues to perform strongly, reporting a 17% year-over-year revenue increase to $11.5 billion — though this came in slightly below forecasts.
