Studios risk losing AI advantages as low-cost tools spread

In short: Big film studios are spending on AI, but the same tools are getting cheap and widely available, which could help smaller creators catch up fast.

What's going on

Film studios are investing in AI to speed up work like planning scenes, creating visual effects, and finishing edits. The Financial Times reports that this brings a risk called competitive erosion, meaning any advantage a studio gains can disappear once everyone else can buy similar tools.

Research cited in the report from MIT suggests a bigger problem for executives and investors. It says 95% of companies using AI report zero measurable return on investment, meaning they cannot point to clear profit gains or cost savings. That puts pressure on studio leaders, including Disney CEO Bob Iger, to explain expensive partnerships, such as a reported $1 billion deal with OpenAI, during earnings calls.

At the same time, smaller teams may benefit more than big studios. Indie filmmakers and boutique production companies can use AI for things like previs (a rough animated preview of a scene), virtual actors (computer-made performers), and faster editing and post-production. It is like giving a small kitchen the same appliances as a large restaurant, but without the large restaurant’s rent, staffing rules, and older equipment.

The report also notes that large studios face extra friction from union contracts and negotiations, with major agreements expiring June 30, 2026. Those costs and rules can make it harder to turn AI speed-ups into real savings.

What to watch

One prediction is that AI-made proof-of-concept trailers, quick sample videos used to raise funding, could shift financing toward smaller, faster creators. If post-production timelines shrink from weeks to days, studios may need new ways to stand out beyond simply having bigger budgets.

Source: Financial Times