Netflix, NFLX, admits it used generative AI in a big sci-fi hit to cut costs

Netflix has confirmed that it used generative artificial intelligence (AI) for visual effects in one of its original series—marking a first for the platform.

Co-CEO Ted Sarandos revealed that AI was used to create a scene featuring a collapsing building in The Eternaut, a science fiction show set in Argentina. The technology, which can generate imagery from prompts, allowed the production team to complete complex scenes more quickly and affordably.

“The cost of it just wouldn’t have been feasible for a show with that kind of budget,” Sarandos said.
“That sequence is actually the very first piece of final generative AI footage to appear in a Netflix original film or series. The creators were thrilled with the result.”

Controversy Over AI in Entertainment

While Sarandos praised the benefits of AI for smaller-budget productions, the technology remains highly controversial in the entertainment world. Critics argue that generative AI can produce content by replicating existing creative work without permission, and there are fears it may displace human jobs in the industry.

These concerns were central during the 2023 Hollywood strikes, where actors and writers called for greater oversight on AI’s use in content creation. The union SAG-AFTRA pushed for tighter rules, reflecting broader anxiety about AI's potential to erode traditional filmmaking jobs.

Industry Impact

Netflix reported a 16% increase in revenue to $11 billion in Q2 2025, with profits rising to $3.1 billion—up from $2.1 billion the year prior. The company attributed part of this success to the final season of Squid Game, which racked up 122 million views.

As AI continues to reshape the industry:

• Tyler Perry paused an $800 million studio expansion in 2024 due to concerns about AI's impact on jobs.
• OpenAI’s Sora and similar tools have drawn attention for generating high-quality footage from simple text prompts, sparking both admiration and anxiety.

Industry Reaction

Davier Yoon, co-founder of animation studio CraveFX, said Netflix’s move was expected as more studios embrace AI to cut costs and expand creative reach.

“AI opens the gate for smaller studios to create visuals that look like big-budget productions,” Yoon noted.
“But at the end of the day, it’s still the artist who chooses what appears on screen—not the AI.”