Netflix Begins Using AI Effects To Cut Costs

Netflix has revealed it used generative artificial intelligence (AI) for the first time, in one of its original series, marking a significant shift in the company’s production approach to reduce costs and speed up workflows.

Co-CEO Ted Sarandos announced that a key visual effects sequence in ‘The Eternauts,’ a new Argentine science fiction show, was created using AI.

“The scene, depicting a building collapse in Buenos Aires, was completed “10 times faster” than it would have taken with traditional visual effects tools,” Sarandos said.

“This was the first generative AI final footage to appear on screen in a Netflix original,” he stated, adding that the creators were “thrilled with the result.”

According to Sarandos, using AI made an otherwise expensive scene achievable within the show’s limited budget.

Generative AI, which produces images and videos from text prompts, has sparked controversy across the entertainment industry. Critics argue it repurposes artists’ work without consent and threatens creative jobs.

These concerns were central to the 2023 Hollywood strike, during which the Screen Actors Guild, American Federation of Television and Radio Artists (SAG-AFTRA) demanded stronger protections against the unregulated use of AI.

Despite ongoing debate, some see Netflix’s move as inevitable. Davier Yoon, co-founder of Singapore-based animation studio CraveFX, said it was only a matter of time before more major studios embraced generative AI.

“AI definitely opens the gate to allow smaller studios to achieve big-budget-looking visuals,” Yoon said. “Ultimately, it is the artist who decides what ends up in the final image—not the AI.”

Still, the technology remains divisive. In 2024, Hollywood producer Tyler Perry paused an $800 million expansion of his Atlanta studio, citing concerns that AI’s rapid development could lead to widespread job losses in the creative sector.

His decision came amid growing unease following the release of tools like OpenAI’s Sora, which can generate high-quality video from simple text prompts.

Sarandos made his remarks as Netflix reported strong financials for the second quarter of 2025.

The company posted a 16% year-on-year revenue increase to $11 billion, with profits rising from $2.1 billion to $3.1 billion.

The performance was partly driven by the global success of Squid Game Season 3, which garnered 122 million views.