The entertainment industry is at a crossroads, with generative AI video tools promising to revolutionize filmmaking while stirring unease among creatives. Reports have surfaced that streaming giants Netflix and Disney are quietly testing tools from Runway AI, a New York-based startup that’s making waves in Hollywood.
While Disney is cautiously exploring the technology without immediate plans to integrate it into production, Netflix is already leveraging AI to cut costs and accelerate workflows. This shift, exemplified by a scene in Netflix’s Argentine sci-fi series *The Eternaut*, raises questions about the future of filmmaking, the role of human creatives, and the ethical boundaries of AI in entertainment.
Runway AI: From Choppy Clips to Hollywood Contender
Runway AI burst onto the scene in early 2023 with a model capable of generating three-second video clips from text prompts, like “drone footage of a desert landscape.” Though initially rough, the startup’s technology has evolved rapidly.
Today, Runway is valued at over $3 billion, having raised $545 million from investors. Its latest innovation, Act-Two, is poised to disrupt traditional motion capture, a process long known for being clunky, expensive, and reserved for big-budget productions. Act-Two allows filmmakers to map human movements from a simple video onto animated characters without the need for specialized suits, markers, or studio setups. This democratizes animation and visual effects (VFX), opening doors for smaller productions to achieve blockbuster-quality results.
Runway’s traction in Hollywood is undeniable. Lionsgate, the studio behind *The Hunger Games* and *John Wick*, has partnered with Runway to train a custom AI model on its film library, enabling tailored applications for pre-production and post-production. This deal, alongside interest from Netflix and Disney, signals a growing acceptance of AI as a tool to enhance efficiency in filmmaking.
Netflix’s Bold Step: AI in *The Eternaut*
Netflix has taken a pioneering step by incorporating generative AI into its original content. In the Argentine series *The Eternaut*, a dramatic scene depicting a building collapse in Buenos Aires was created using AI-powered tools. Netflix co-CEO Ted Sarandos revealed during a July 2025 earnings call that this sequence was completed ten times faster than traditional VFX methods, at a fraction of the cost.
“The cost of [the special effects without AI] just wouldn’t have been feasible for a show in that budget,” Sarandos noted, emphasizing that the technology enabled a smaller-scale production to achieve ambitious visuals. While Runway’s tools were not used for this specific scene, Netflix is actively testing the startup’s video generation software to streamline its production pipeline.
Sarandos framed AI as a tool to empower creators, stating, “This is real people doing real work with better tools.” He argued that AI enhances storytelling by enabling faster pre-visualization, shot planning, and VFX creation, allowing creators to push creative boundaries without breaking the bank. The results in *The Eternaut* were met with enthusiasm from both creators and audiences, suggesting that AI-generated footage can blend seamlessly into high-quality productions.
Disney’s Cautious Dance with AI
In contrast, Disney is taking a more reserved approach. The company has been testing Runway’s tools and engaging in discussions about their potential, but a spokesperson clarified that there are “no immediate plans” to integrate AI into its production pipeline.
This hesitation may stem from Disney’s recent legal action against Midjourney, another AI startup, for alleged copyright infringement.
The lawsuit reflects broader industry concerns about how AI models are trained, often using vast datasets that may include copyrighted material without permission. With over 35 copyright-related lawsuits filed against AI companies, including Runway, the legal landscape remains a minefield for studios looking to adopt these technologies.
Disney’s wariness also reflects Hollywood’s cautious culture. The 2023 writers’ and actors’ strikes, which centered heavily on AI’s potential to displace jobs, secured protections ensuring human control over AI applications and compensation for digital replicas. Disney’s dual approach — exploring AI while suing over intellectual property—highlights the delicate balance studios must strike as they navigate this transformative technology.
Hollywood’s AI Dilemma: Opportunity or Threat?
The adoption of AI tools like Runway’s sparks both excitement and apprehension. For producers, the benefits are clear: faster production times, lower costs, and the ability to create high-quality effects on modest budgets. Runway’s Act-Two, for instance, could make motion capture accessible to independent filmmakers, while its Gen-4 model enables consistent character and environment generation across scenes. Lionsgate’s vice-chairman, Michael Burns, marveled at the pace of innovation, noting that Runway can deliver new tools in as little as a week to meet specific filmmaking needs.
However, the technology is not without its critics. The 2023 Hollywood strikes underscored fears that AI could erode livelihoods, particularly for VFX artists, animators, and writers. Industry professionals worry that AI-generated content might homogenize creative output or replace human talent altogether.
Audience skepticism also persists, with some viewers noticing subtle flaws in AI-generated footage that erode trust, especially in genres like true crime where authenticity is paramount. As one critic remarked, “If I can’t trust what I’m seeing, what’s the point of storytelling?”
Legal and ethical questions further complicate the picture. The training of AI models often involves scraping vast amounts of data, raising concerns about intellectual property and consent. Disney’s lawsuit against Midjourney and ongoing debates about fair use highlight the uncertainty surrounding AI’s future in Hollywood. Additionally, the environmental impact of training complex AI models, which require significant computational power, adds another layer of concern.
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The Road Ahead: A New Film Genre or a New Battleground?
Runway AI’s rise, coupled with Netflix’s and Disney’s experimentation, suggests that generative AI is here to stay in Hollywood. Netflix’s success with *The Eternaut* may pave the way for more AI-driven productions, while Lionsgate’s partnership with Runway hints at a future where studio-specific AI models create personalized content or interactive media. Runway’s CEO, Cristóbal Valenzuela, emphasizes that the company’s tools prioritize creative control, allowing filmmakers to go beyond simple text prompts to craft precise, high-quality visuals.
Yet, the industry remains at a tipping point. For every producer excited about cost savings, there’s a VFX artist or animator worried about job security. The mixed reactions on platforms like X — where some praise AI’s democratizing potential while others warn of an “AI arms race” — reflect this divide. As studios like Netflix and Disney push forward, they must navigate a landscape fraught with legal, ethical, and creative challenges.
In the end, Runway AI’s tools offer a glimpse into a future where filmmaking is faster, cheaper, and more accessible—but at what cost? As Hollywood grapples with this question, one thing is certain: the debate over AI’s role in entertainment is just beginning.
