As 2025 draws to a close, the entertainment industry reflects on a transformative year where artificial intelligence shifted from a backstage tool to a front-and-center player in film and television production.
What began in January as tentative explorations - studios dipping toes into AI for efficiency in internal processes like visual effects and script tweaks - evolved into bold integrations by December, with generative AI appearing in content pipelines and even on streaming platforms.
This rapid pivot, driven by technological advancements and competitive pressures, has sparked debates on creativity, ethics, and the future of storytelling, even as public enthusiasm lags behind industry hype.
The Cautious Dawn: Early Experiments and Legal Battles
At the year's outset, Hollywood's approach to AI was marked by conservatism and conflict.
Major studios, including Disney, Universal, and Warner Bros. Discovery, initiated lawsuits against AI companies like Midjourney for alleged copyright infringement, claiming their models were trained on proprietary content without permission.
These actions echoed broader 2025 litigation trends, where IP disputes over AI spiked, with cases like Hendrix v. Apple and Bartz v. Anthropic highlighting tensions between innovation and intellectual property rights.
A landmark ruling in June favored an AI company in a copyright infringement suit brought by authors, setting a precedent that encouraged studios to move from confrontation to collaboration.
Despite the legal hurdles, early adopters began leveraging AI for cost savings. Netflix, for instance, employed generative tools for special effects in its original series The Eternaut, demonstrating how AI could streamline VFX without replacing human creatives entirely.
The streamer also released guidelines for partners, promoting AI's use in content development while emphasizing ethical boundaries, such as avoiding mandates for its adoption. This mirrored a industry-wide shift: by mid-year, AI was aiding in de-aging actors and green-screen removal, saving millions in post-production budgets amid ongoing recovery from 2023 strikes.
Landmark Deals: Partnerships That Redefined the Landscape
The turning point came with high-profile alliances that embedded AI deeply into Hollywood's ecosystem. In December, Disney inked a three-year, $1 billion equity investment deal with OpenAI, granting Sora - OpenAI's text-to-video generator - access to over 200 iconic characters from Disney, Marvel, Pixar, and Star Wars franchises.
This agreement not only positions Disney as a major OpenAI customer but also paves the way for user-generated AI videos to appear on Disney+, with curated selections debuting in early 2026. Disney employees will leverage ChatGPT tools internally, signaling a bet on AI to enhance storytelling while monetizing fan creativity.
Netflix's leadership was equally vocal about expansion. Co-CEO Ted Sarandos declared the company "all in" on AI, highlighting its role in improving recommendations and personalizing viewer experiences, with generative tools presenting "significant opportunities" across the platform.
By October, Netflix had integrated AI agents for automating content decisions, from personalization to operations, and began testing conversational search features powered by models like ChatGPT.
Amazon, meanwhile, ventured into AI dubbing for anime series on Prime Video, localizing shows like Banana Fish, No Game No Life: Zero, and Vinland Saga without human translators or voice actors. The results were widely panned as "hilariously bad" and "inexcusably poor," leading to swift removal after backlash from fans and voice actors. Despite the fiasco, Amazon persisted with AI-generated TV recaps, though these too faced criticism for inaccuracies and were eventually pulled.
From Rejection to Legalization: A Path Paved with Compromises
The journey from lawsuits to acceptance was swift. Early 2025 saw a surge in copyright disputes, with settlements like a $1.5 billion payout in one case underscoring the financial stakes.
By year's end, however, partnerships dominated, as seen in Disney's Sora deal and emerging ventures like Natasha Lyonne's AI startup Asteria, focused on ethical content creation.
Legal frameworks evolved too: a first-of-its-kind decision in June ruled in favor of an AI firm, reducing barriers and encouraging "legalization" of AI tools in production.
Sora's integration exemplifies this normalization. Starting in 2026, fans can generate short videos featuring beloved characters, with select content streaming on Disney+ - a move that could democratize filmmaking but raises concerns about quality and originality.
Challenges and the Road Ahead: Hype vs. Reality
Despite the progress, 2025's AI experiments yielded little to excite audiences. Critics labeled outputs as "slop" - formulaic and uninspired - with examples like Amazon's dubs and Showrunner's bizarre clips (featuring figures like Donald Trump and Abraham Lincoln) failing to impress.
Enthusiasm largely stems from executives eyeing cost cuts, estimated at 20-30% in VFX alone, rather than creative breakthroughs. Animators and creators, including former Disney staff, expressed fears of eroding storytelling traditions.
Looking to 2026, Hollywood's AI trajectory suggests deeper entrenchment. With deals like Disney-OpenAI setting precedents, expect more on-screen AI, potentially in full features or interactive content.
Yet, as the industry navigates ethical minefields and public skepticism, the true test will be whether AI elevates narratives or merely commodifies them. 2025 proved studios are ready to taste AI; now, they must prove it's palatable.
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Author: Slava Vasipenok
Founder and CEO of QUASA (quasa.io) - Daily insights on Web3, AI, Crypto, and Freelance. Stay updated on finance, technology trends, and creator tools - with sources and real value.
Innovative entrepreneur with over 20 years of experience in IT, fintech, and blockchain. Specializes in decentralized solutions for freelancing, helping to overcome the barriers of traditional finance, especially in developing regions.
