Netflix has officially confirmed its first use of generative artificial intelligence (AI) to create visual effects in one of its original series, marking a new milestone in the intersection of technology and entertainment. The announcement comes amid rising industry scrutiny over the role of AI in creative production.
Speaking during the company’s second-quarter earnings call, Netflix co-CEO Ted Sarandos revealed that the technology was used to generate a complex building collapse scene in The Eternauts, a science fiction series set in Argentina. Sarandos explained that using AI significantly reduced both production time and costs.
“The cost of [the scene] wouldn’t have been feasible for a show with that budget,” Sarandos said. “That sequence is actually the first generative AI final footage to appear on screen in a Netflix original. The creators were thrilled with the result.”
Netflix’s disclosure coincided with its announcement of a 16% increase in revenue year-on-year, reaching $11 billion for the three months ending in June. Net profit rose from $2.1 billion to $3.1 billion, buoyed by strong viewership numbers for the final season of the Korean thriller Squid Game, which attracted over 122 million views.
The use of generative AI—technology that can create visuals or videos from text-based prompts—has long been a contentious issue in Hollywood. Critics argue that such tools may exploit copyrighted content and threaten traditional jobs in the entertainment industry. These concerns were at the heart of the Screen Actors Guild–American Federation of Television and Radio Artists (SAG-AFTRA) strike in 2023, which called for stricter regulation of AI in film and television production.
In 2024, high-profile filmmaker Tyler Perry halted an $800 million expansion of his Atlanta studio, citing worries over the accelerating use of AI-generated video. The launch of tools like OpenAI’s Sora has demonstrated how quickly and convincingly AI can produce realistic footage—raising both excitement and alarm across the industry.
Still, some in the creative sector view AI as a valuable asset. Davier Yoon, co-founder of Singapore-based animation studio CraveFX, said the integration of generative AI was inevitable.
“AI definitely opens the gate for smaller studios to achieve visuals that previously required blockbuster budgets,” Yoon said. “But ultimately, it’s the artist who decides what ends up on screen—not the AI.”
As generative AI continues to gain traction, its growing presence in content production is forcing studios, creators, and regulators to rethink the future of filmmaking—balancing innovation with artistic integrity and job preservation.
