If you’ve heard this before, please stop. A technology company has drawn the ire of the entertainment industry for misusing intellectual property.
You might remember Napster or music labels. Or YouTube or TV networks. This latest chapter is about AI companies and Hollywood as a whole.
In recent months, it has been confirmed that 2025 will be the year that Hollywood confronts the brave new world of AI. The industry may be eagerly awaiting the now bizarre controversy surrounding the use of AI voice technology in Oscar-nominated films such as: brutalist and Emilia Perez early this year.
Hollywood’s main adversary is OpenAI, an AI company with over 800 million users and rapidly approaching a $1 trillion valuation. From trying to call a movie she OpenAI’s “ask for forgiveness, not permission” approach, including using an unauthorized replica of Scarlett Johansson’s voice in its voice assistant and releasing its text-video service Sora without restrictions, has Hollywood going after Hollywood.
Find out about the arrival of AI video into the mainstream, the creativity and monetization potential it offers, and Hollywood’s potential next move.
A turning point year for AI video
Generative video has come a long way in 2025, blurring the lines of reality. Beyond OpenAI, there are many companies developing AI-powered video tools. Google’s Veo tool has also been praised for its hyperrealism, but while the tech giant has taken a more responsible approach, limiting the technology to paid subscribers and blocking most attempts to circumvent likeness and IP, users are still finding workarounds.
Other big tech companies are also investing in this space, including Meta’s AI Studio and TikTok’s Symphony Avatars (as well as TikTok’s parent company ByteDance’s OmniHuman). Many startups such as Pika, Runway, Luma, and Pollo AI are also competing. The important thing to remember here is that Sora is just the tip of the iceberg.
To its credit, Hollywood saw this moment coming. The 2023 Writers’ and Actors’ Strike was prolonged in part due to concerns about the use of this technology. They secured guardrails around script generation, consent and compensation for the use of actors’ likenesses. What they may not have expected was that companies like OpenAI, which embody Napster’s rebellious spirit, would bypass studios and talent agencies and launch with few restrictions on the use of their voices, likenesses, and IP.
Unleash a world of remixed storytelling
The public’s reaction to OpenAI’s Sora 2 release and its accompanying social network has differed from Hollywood’s reaction. Consumers have embraced this new form of content creation, and Sora has climbed to No. 1 in the App Store and remained there for several weeks. Sora reached 1 million downloads faster than ChatGPT.
Sam Altman, co-founder and CEO of OpenAI, said Sora is an opportunity for creators to deepen their connection with fans and create “interactive fan fiction.” I’ve been testing Sora over the past month, and it’s been a lot of fun placing my avatar in many of my favorite worlds, casting spells as a Dungeons and Dragons-inspired sorcerer, or wielding a Jedi-inspired laser sword. I was impressed with the ease and speed of creation. The only limit is your imagination.
This is the verdict on what will happen with deepfake videos, democratized content creation tools, and drastically reduced production costs for creators. We provide independent creators with a great canvas to bring their visions to life. Creating epic scenes has historically been the preserve of major studios and VFX companies. Creators can now take their work to the next level without spending a fortune.
It also opens up new outlets for expressing your fandom. For decades, fan communities have demonstrated a strong desire to “remix” their favorite stories through fan fiction, trailer recuts, fan art and comics, and more. The flood of remixes (albeit unauthorized) of actors and anime characters on Sora shows fans’ eagerness to take a more active role in how the story is told. Consumers increasingly expect to generate their own content on demand, from video clips using tools like Sora to songs using services like Suno AI. Hollywood needs to adapt and respond to this need or risk missing out on opportunities to engage with new kinds of fans.
The way forward: Litigation, partnership and licensing
In Hollywood, where the highest-grossing films today are almost always prequels, sequels, reboots, or based on existing IP, AI video holds tremendous opportunity. Fans already have a deep connection to these works, and allowing viewers to “remix” them will provide new monetization and community-building opportunities. This will require a fundamental shift from Hollywood, which has tightly controlled who gets to tell the stories. Proper management and governance will be a key prerequisite for sanctioned Hollywood participation.
Hollywood has many avenues to explore when navigating the world of AI video generation.
Lawsuit: There is no denying that Sola applied copyright law to the wood chipper. From Pokemon committing crimes to deepfakes of actors like Bryan Cranston who were later busted, Sora is full of depictions that no studio or agency would approve of. I’ve heard rumors of lawsuits and angry studios and agencies, but to date no lawsuits appear to have been filed. It’s not like they won’t come, like Napster or YouTube. Major studios previously sued Midjourney, accusing the AI startup of copyrighting its image generation tools.
Studio reluctance to go head-to-head with OpenAI may stem from a recognition of the importance that AI-generated video will play in the future of business. (OpenAI is also more flexible with Wild West post-launch concerns.) Studio heads and agents no doubt see dollar signs in proper licensing of voice, likeness, and IP. This new revenue stream is especially attractive given continued declines in movie theater attendance and cord-cutting, as well as rising production, marketing and advertising costs.
Link up (partnership)
Given the significant investment required to develop basic AI models, partnering with a technology company may be a more logical solution than building one in-house. Imagine an interactive component on Paramount+ that lets you create your own SpongeBob SquarePants mini-episodes using white-label AI video generation tools. OpenAI’s aggressive opening shot may make the industry less inclined to collaborate with them, but as we’ve previously covered, there are plenty of AI video generators that would likely welcome a partnership. The music industry offers a similar strategy. Universal Music Group has partnered with Stability AI to co-develop professional AI music creation tools.
license
While some studios may regret launching unprofitable streaming services to compete with Netflix, they may not be keen on launching another service leveraging technology with questionable profit margins. It could be profitable to license your IP to a service like Sora in the same way that you currently syndicate it to networks and Netflix. But Hollywood will need to introduce safeguards and controls that AI companies have been reluctant to introduce.
Rapid advances in AI video in 2025 are exacerbating the problem in Hollywood sooner than anyone expected. Whether in the courtroom or in the boardroom, now is the time to develop a mutually beneficial strategy. I’m very bullish on this technology, but I think there’s going to be a tough battle between Hollywood and Silicon Valley.
In the near future, we may see a world where famous actors, musicians, and rights holders allow licensed deepfakes and remixes of their content, creating a new wave of short, personalized memes, short films, and song snippets. We, the viewers, will use these in the same way we use GIFs and stickers today. In the long term, this will usher in a whole new phase of personalized content at scale. Even if the program you want to watch isn’t available, one will be created in real time.
New legal precedents will and must be set because artists and rights holders need to be compensated for their work. But don’t get me wrong. There’s a good chance that in the not-too-distant future, much of the content we watch will be created by AI, or whose creators were augmented by AI.
The opinions expressed in Fortune.com commentary articles are solely those of the author and do not necessarily reflect the author’s opinions or beliefs. luck.
