DreamWorks Co-founder Jeffrey Katzenberg: AI is Rapidly Changing Animation and Film Production, Hollywood Should Participate in AI Rule-making
Elon Musk shared a lengthy article by DreamWorks co-founder Jeffrey Katzenberg titled "The World is Changing: AI For Creativity" on the X platform. In the article, Katzenberg stated that AI is rapidly changing animation and film production, and "Hollywood needs to accept that AI is not going away"; the industry should shift from resistance to participating in the formulation of AI usage rules.
He reiterated his judgment from three years ago. In 2023, at the Bloomberg New Economy Forum, he said that producing a world-class animated film used to require 500 artists working for five years, but in three years, the required manpower and time will be less than 10% of what was needed then, effectively compressing production time and costs by up to 90%. The three-year deadline for this prediction coincided with the publication of the article.
Regarding capabilities, he believes that AI is currently good at reasoning, evaluating, optimizing, and pattern recognition, but true creativity still depends on human taste, intuition, empathy, and desire for expression. The creation of a work by AI is different from a creator actively expressing a certain idea. He described Hollywood's opposition as "resistance from the outside, love from the inside."
He used the history of technology to support his position: sound films and computer animation have eliminated some old jobs but have also expanded artistic forms and creative space. He cited companies as examples: Kodak and Blockbuster were eliminated after resisting new technologies, while Apple and Netflix became winners by embracing new technologies, summarizing that "resisting technology comes with the risk of being marginalized."
He proposed conditions for collaboration between AI developers and creators: creators' works and ideas can only be used with authorization, credit, and reasonable compensation. He anticipates that as AI further lowers the costs and thresholds of film production, more movies will emerge, along with new narrative forms.
Weeks before the article was published, reports indicated that Katzenberg was establishing an AI video generation startup. Co-founders include former OpenAI Sora head Bill Peebles and former Dropbox CFO Sujay Jaswa, with products aimed at professional filmmakers and discussions ongoing with investors, including Andreessen Horowitz, for significant funding.
In terms of market mechanisms, this is a viewpoint output with no direct transactions, but the interest structure is clear. Beneficiaries include AI video tool companies and computing power providers, including Katzenberg's new company and Musk's xAI, which promotes Grok Imagine video generation. Endorsements from senior Hollywood figures can reduce the public resistance to studios procuring AI tools. The labor-intensive segments under pressure include animation in-between frames, special effects outsourcing, and post-production teams, which are the parts of the budget most easily replaced by AI. Unions and copyright holders will leverage the three conditions of "authorization, credit, and compensation" to secure their positions in the new revenue-sharing system.
Source: Public Information
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Katzenberg's career has repeatedly intersected with media transformations. From 1984 to 1994, he led Disney's film division, overseeing classics like "The Little Mermaid," "Beauty and the Beast," "Aladdin," and "The Lion King," leading Disney's animation renaissance. After a fallout with Michael Eisner in 1994, he left, subsequently suing Disney for bonuses, settling in 1999 for about $250 million. That same year, he co-founded DreamWorks SKG with Steven Spielberg and David Geffen. The 2001 film "Shrek" won the first Oscar for Best Animated Feature, establishing DreamWorks as the only 3D animation brand that could compete with Pixar. In 2016, Comcast's NBCUniversal acquired DreamWorks Animation for $3.8 billion. He has also faced failures: in 2020, he and Meg Whitman launched the short video platform Quibi, raising $1.75 billion, but announced its closure about six months after launch.
After leaving DreamWorks, his money and resources shifted towards tech investments. He co-founded the investment firm WndrCo with Sujay Jaswa, focusing on consumer tech and enterprise software. Now, the two, along with former Sora head Bill Peebles, are establishing an AI video company, with a clear path: leveraging Hollywood connections and credibility in the content industry to secure studio clients and copyright collaborations; utilizing the model capabilities of the former OpenAI team to establish technological barriers; and using funding from top venture capital firms like a16z to support high computing costs. This lengthy article was published during a financing window, effectively endorsing the product within the industry.
Historical comparisons are direct. The 1927 film "The Jazz Singer" marked the beginning of the sound film era, leading to job losses for many silent film actors and cinema musicians, but the film industry subsequently expanded. In 1995, Pixar released the first fully CGI feature film, "Toy Story"; by the early 2000s, Disney had massively shut down its hand-drawn 2D animation departments, laying off many hand-drawn animators, while 3D animation became the mainstay of global box office. The corresponding events of this round are: in 2023, the American Writers Guild went on strike for 148 days, and the Actors Guild for 118 days, incorporating AI clauses into labor contracts; in 2024, Lionsgate partnered with Runway to train models using its own film library; in 2025, Disney and Universal sued Midjourney for copyright infringement. The industry is in a transitional phase from resistance to negotiating rules.
Structurally, this situation represents technological substitution. The costs of animation and special effects are primarily labor-related: 500 artists working for five years, with significant expenses in standardized processes like in-between frames, materials, lighting, and rendering. Generative models are replacing this portion of labor that can be standardized, while decisions dependent on taste, such as scriptwriting, character design, and directorial judgment, remain scarce. As labor costs decrease, the bottleneck shifts from "can it be done" to "what to create" and "can the materials be used legally." Thus, authorization, credit, and compensation will become the core of the next round of negotiations: training data and IP licensing will replace labor as the new major cost items.
ABAB News · Cognitive Laws
Technology will eliminate processes but will not eliminate taste.
Where costs drop to zero, copyright becomes the new toll booth.
Those who resist new technologies will ultimately have to accept rules set by others.