• Hollywood companies continue to integrate AI, even as they challenge its applications in court.
• AI startups like Toonstar and Chronicle Studios are innovating in animation.
• Studios are using the tech to promote content discovery and reduce production costs.

Hollywood giants are pushing back on AI's encroachment. Disney and Universal recently sued Midjourney, accusing it of using tech to rip off their famous characters.

But inside entertainment companies, it's a whole different story. The biggest studios and filmmakers are using AI technology in various ways — and people in Hollywood are taking note. The AI on the Lot conference in May has doubled its attendance to 1,200 over three years, while AI editing company Runway attracted some 1,000 people to its third film festival.

The tantalizing promise of AI is that it could solve big problems in the entertainment business, like content discovery and high production costs.

"No matter how you feel about AI tools in the media and entertainment business, they're here to stay," said Peter Csathy, who advises media companies.

Investors are climbing on board companies like Ecco, an AI startup that helps people find titles across multiple streamers using queries like "find me all the shows about F1." It has raised $7 million from Ben Silverman, Shaquille O'Neal, and others.

One such investor is Ishan Sinha, a consumer partner at Point72 Ventures. He said the hype around AI-generated video hasn't translated into consumer interest. He sees the most potential in companies that use AI to promote distribution through personalization, translation, and IP ownership.

"We believe the winning consumer businesses aggregate eyeballs — they have some type of a hook, whether it's content aggregation, playlists, proprietary IP, etc., that acquires and retains users," he said.

Point72 Ventures' investments include GlobalComix, which uses AI to bring recommendations and language translation to comic book and manga readers that they couldn't otherwise find, and Cheehoo, which is working with studios to simplify animation.

The firm also invested in Chronicle Studios, which aims to help animators grow their audiences and monetize their projects beyond YouTube.

Here are some AI companies transforming different areas of Hollywood, and the pitch decks some of them used to raise funding.

Faster, cheaper animation

AI may still be a long way from making full-length movies, but it's quickly making inroads in animation. Toonstar, a startup behind "StEvEn & Parker," uses AI for tasks ranging from developing storylines to creating images and says it can make episodes at a fraction of the cost of conventional methods.

Chronicle Studios is a startup cofounded by Chris deFaria, a former animation president at Warner Bros. and Comcast's DreamWorks, that's using AI to help creators level up, with a focus on animators. Others chasing the animation or independent creator opportunity are Further Adventures, a new studio that's investing in digital creators and independent filmmakers; Invisible Universe, an animation studio backed by Seven Seven Six; and Promise, an AI studio backed by Peter Chernin's North Road, Andreessen Horowitz, and Google.

"AI can't really make stories that are enduring," deFaria told BI. "The biggest pain point is getting an audience."

Read more:

• A former DreamWorks president just raised $11.6 million to build franchises using AI
• Read the pitch deck for a Toonstar NFT animated series backed by Mila Kunis

AI is transforming special effects

Other companies, such as Runway, which has raised $545 million from General Atlantic and others, and Connect Ventures-backed Deep Voodoo, are using AI to provide tools for de-aging and other special effects work.

Some have entered the rollup stage. Metaphysic, which was known for de-aging Tom Hanks and Robin Wright for the Robert Zemeckis film "Here," was acquired in February by DNEG Group's AI company Brahma. Papercup's voice-cloning IP was acquired in June by RWS, a content solutions company, while its team was acquired by Scale AI.

AI is also being applied to speed the dubbing process, recreate the voices of bygone actors, and restore old films and TV series. With streamers going global, there's a big demand to translate titles for new markets, and new approaches to AI promise to eliminate awkward dubbing of the past.

Runway made news this past year for deals with Lionsgate to train an AI model on its library and with AMC Networks, which will use its tools to generate promotional material for its shows.

One player, Deepdub, which uses AI to dub movies and shows, just extended its tech to real-time dubbing of live sports commentary, esports shoutcasting, and breaking news coverage.

"For the first time, broadcasters can deliver real-time, multilingual dubbing that captures not just words, but the energy, urgency, and authenticity of live content," said Ofir Krakowski, the company's CEO.

Read more:

• Read the pitch deck from Metaphysic, an AI startup behind a viral Tom Cruise deepfake
• How AI Startup Runway aims to simplify video editing and filmmaking
• Here's the pitch deck AI startup Papercup used to raise $20 million to help media go global

Startups are tackling different phases of production

A third area where AI startups have been active in Hollywood is in the content creation process more broadly.

This can involve everything from AI in the script reading phase to scouring video libraries to generate new ideas for titles based on what's performed well in the past.

One, Paris-based Moments Lab, recently raised a $24 million round from backers including Oxx and Orange Ventures to expand its AI tools that are used by Warner Bros. Discovery, Hearst, and others.

Moments can make clips for social media seven times faster than the conventional approach, cofounder Phil Petitpont recently told BI, citing internal research. He said media companies would be able to use AI to help make full-length documentaries based on their video libraries in several months, while predictive modeling tools that can suggest audience-boosting changes are a year away.

"We're not very far from that because audience data is very easily available on YouTube," he said.

Read more:

• This startup raised $24 million to help Hollywood use AI to save time and money. Read its pitch deck.
• A new AI product being tested by top YouTubers like MrBeast scans a creator's catalog to give them fresh video ideas
• The pitch deck Strada, an AI startup to streamline content creation, used to raise $2 million
• Here's the pitch deck Filmustage, an AI startup focused on streamlining pre-production, used to raise $1.5 million

• Warner Bros. Discovery — the brainchild of media mogul David Zaslav — is splitting up.
• Wall Street had long questioned the wisdom of WBD, and Zaslav now seems to agree.
• While this spinoff was predictable, it sparks questions for other media companies.

The ill-fated marriage between Warner Bros. and Discovery is heading for divorce — and Wall Street is cheering.

Warner Bros. Discovery on Monday announced plans to split its declining TV networks from its growing streaming and studios business. This spinoff proposal comes three years after WBD's inception. If all goes well, the spinoff will happen in mid-2026.

WBD CEO David Zaslav will oversee the sexier streaming part, while CFO Gunnar Wiedenfels — known for delivering "synergies" — will be in charge of the shrinking networks. WBD isn't alone, as Comcast is also splitting from most of its cable assets.

By largely undoing the merger, Zaslav is acknowledging something Wall Street has been saying for a while: WBD's assets are better off apart.

WBD shares were up as much as 13% in early trading. (However, Comcast's stock also popped when its spinoff was announced last fall, and has since fallen more than 20%.)

"The decision to separate Warner Bros. Discovery reflects our belief that each company can now go further and faster apart than they can together," Zaslav said on a call with investors about the spinoff.

When asked for comment, a WBD spokesperson referred Business Insider to comments made by executives on the investor call.

Better late than never

Many media analysts were initially excited when Zaslav orchestrated the deal to form WBD. But they soon soured on the media conglomerate as cord-cutting accelerated and WBD's streamer — Max/HBO Max — missed lofty expectations and failed to truly challenge the likes of Netflix.

Zaslav and company took note. WBD executives telegraphed this spinoff by reorganizing the business late last year, separating the TV networks from its studios and streaming businesses.

Wall Street was pleased by this potential split, which was the key catalyst for WBD's stock's 16% rally in the past month, UBS media analyst John Hodulik told BI last week.

Others agreed.

"Investor excitement for a Warner Bros. Discovery spin-off of its Global Linear Networks is building by the day," Lightshed analysts led by Rich Greenfield wrote last week.

Bank of America's Jessica Reif Ehrlich wrote in an early-June note that a "spin of studios and streaming could be the best way to unlock the significant unrecognized value of the company."

So far, it seems like she's right.

A sign of the times?

WBD's announcement will likely spark more speculation about future reordering of the media and entertainment landscape.

It's long been the expectation among industry insiders that WBD's spun-off linear networks would combine with others, potentially Versant, the linear assets that Comcast is spinning off. Other ideas that have been floated in media circles are a combination with Paramount — assuming its Skydance deal ever gets approved — or with Fox's linear assets.

Reordering is also afoot across the advertising industry. Two giant holding companies, Omnicom Group and Interpublic Group, are in the process of combining. Their peer WPP is replacing its CEO, Mark Read.

One wild card in the mix with WBD is CNN, with President Donald Trump's general hostility to deals involving media companies.

Longtime ad industry analyst Brian Wieser remarked that the news network could be an asset and a liability, given its history and future ability to attract the ire of Trump, who has been aggressive in targeting the mainstream media.

Wieser wrote on Monday that CNN would "probably benefit" from being separated from all of WBD's other assets as it's "the one part of WBD that could tie up other parts of this transaction so long as any government approvals are required to facilitate its completion."

Another question is the fate of WBD's studio business, which has been dragged down. On a call Monday announcing the separation, Zaslav emphasized that the movie business was harder to project than TV. But he said that by leaning into well-known IP, he saw WBD's studios arm becoming a $3 billion business.

The separation also could put WBD's studios business in play, Bernstein's Lauren Yoon said.

The companies that could ingest such a business include Amazon, Disney, Netflix, and Comcast. However, most of the tech companies haven't historically been big acquirers, and the timing isn't ideal.

"No tech companies want to give the government any reason to be in their business," said Jonathan Miller, chief executive of Integrated Media, which specializes in digital media investments.

Also, expect Bob Iger to field new questions about what's ahead for Disney's linear and cable networks. He once floated the idea of selling them, though he then retreated from the idea.

Disney's line at the time was that it wouldn't get the price it wanted if it sold those properties and that it'd be too complex to separate them from the rest of the company. Iger and Trump have also sparred in the past, and Disney could look to avoid deals that need government approval.

• Google has quietly launched a film and TV production initiative called 100 Zeros.
• Google wants to promote its products and a positive image of tech, particularly to young people.
• The goal is to sell projects to studios, not put them on YouTube.

Google wants to use Hollywood to upgrade its cool factor.

The tech giant has quietly launched a new film and TV production initiative, Business Insider has learned.

The effort, called 100 Zeros, is a multiyear partnership with Range Media Partners, the talent firm and production company whose notable films include "A Complete Unknown" and "Longlegs." It's tasked with identifying projects that Google can help fund or produce. The goal is to get behind an array of scripted and unscripted films and TV shows. (The companies wouldn't comment on a number or timeframe.)

Google has a few goals with 100 Zeros. The company sees it as a way to get the creative community to adopt its newer tech products and services, like its Immersive View feature that lets you see things in 3D, spatial tools that blend the physical and virtual worlds, and AI.

Google also wants to promote a positive view of its products — and tech generally — through entertainment to young audiences by helping shape pop culture.

Last year, 100 Zeros quietly dipped a toe in the water, putting some marketing dollars behind an indie horror film from Neon, "Cuckoo." In exchange, 100 Zeros' logo was prominently shown in the opening credits. Google didn't seek any publicity for the move, but it was indicative of the alignments it wants: A celebrated indie studio ("Parasite," "Anora") and a movie aimed at Gen Z and starring Hunter Schafer, known for "Euphoria" and the "Hunger Games" franchise.

In another step in that direction, Google and Range announced a partnership this spring called "AI On Screen" to commission short films about AI, with the goal of making two into feature films. Here's how it described one of the shorts, "Sweetwater": "When the son of a late celebrity visits his childhood home, a piece of fan mail reveals a startling AI, forcing him to reconcile his mother's legacy."

"Through our continued partnership with Range, we aim to collaborate with the Hollywood creative community in a thoughtful and productive way, upkeeping our ongoing commitment to responsibly support creative expression and explore the possibilities of technology through storytelling," a Google spokesperson said in a statement.

Google wants to make Android cool

In projects where Google is involved early on, the company wouldn't mind if characters clutched Android phones instead of iPhones and used its features like "Circle to Search." That's provided the integration isn't forced. Product placement isn't 100 Zeros' main focus, however. Google has a separate effort with United Talent Agency for marketing partnerships like its recent ones with "The White Lotus" and "Wicked" to promote the Pixel.

One of the ways Google will judge the success of the initiative is how it impacts popular sentiment around the company's products and services. Google dominates the global mobile phone market, but is outsold by Apple in the US. Apple has gained a strong following with Gen Z with its luxury image and blue text bubbles that can make Android users feel left out. Its phones have become entrenched in pop culture, appearing in buzzy titles like "Succession" and "Knives Out." Piper Sandler's spring survey found 88% of US teens owned an iPhone.

Beyond Android, Google search is losing its hold on young people, who are increasingly going to AI or other platforms like Amazon and TikTok for answers to their questions.

Google isn't looking at YouTube as a distributor

Consumer brands are increasingly using Hollywood-style entertainment to spread their messages, as it's gotten harder to get people's attention with traditional ads. The interest is welcome in cash-strapped Hollywood.

A common approach by brands is to lean on established filmmakers and agencies to develop or produce projects. A handful of brands like Procter & Gamble and WeTransfer have gone further and hired in-house expertise. Google's efforts are similar to those of Waffle Iron Entertainment, a studio Nike set up to make original entertainment that aligns with the company's goals while operating at arm's length.

100 Zeros has a small dedicated staff: Penny Lin, a film producer at Range, and development execs Casey Durant and Tony Nguyen. Rachel Douglas, partner and manager at Range, oversees the relationship with Google. On the Google side, the point person is Jonathan Zepp, the managing director of emerging content experiences.

"This initiative is different in that it's staffed by full-time people who come out of Hollywood and are housed at and supported by Range," Douglas said of 100 Zeros.

Consumer brands' flirtation with films isn't guaranteed to last. Some have been halting or slowing film projects amid President Donald Trump's tariffs and attacks on DEI. Even before the tariff news hit, some corporations that had made commitments to the space — including Starbucks, Marriott, and Southwest Airlines — laid off marketers who worked in filmed entertainment as a part of larger corporate cuts, a reminder of the tenuous nature of the work.

One aspect of 100 Zeros that people might find surprising is that it's not looking to leverage YouTube as a primary distribution platform. YouTube has become a TV juggernaut and has been working to make itself a home for premium programming. But 100 Zeros isn't trying to recreate YouTube Originals, the platform's onetime stab at making original shows, or even use YouTube as the first stop for these projects. Instead, the goal is to sell projects to traditional studios and streamers like Netflix.