Netflix Used AI to Generate VFX Footage for “First Time”

Netflix has made its most definitive move yet into AI-generated content, publicly confirming for the first time that it used generative artificial intelligence to create final VFX footage in one of its original productions. The revelation, disclosed during the company’s quarterly earnings call, marks a significant escalation in the streaming giant’s embrace of AI technology – and signals a potential watershed moment for the industry.

The AI-generated sequence appears in El Eternauta (The Eternaut), an Argentinian science fiction series following survivors of a toxic snowfall. Netflix’s internal production team worked with VFX artists to use AI tools for creating a building collapse scene in Buenos Aires – a complex sequence that would traditionally require extensive traditional effects work.

VFX sequence completed 10 times faster with AI

Co-CEO Ted Sarandos didn’t mince words about the efficiency gains: the AI-powered approach completed the VFX sequence “10 times faster than it could have been completed with traditional VFX tools and workflows.” More significantly for budget-conscious productions, he emphasized that “the cost of it just wouldn’t have been feasible for a show in that budget.”

This represents exactly the kind of democratization of high-end VFX that we’ve been tracking in our previous AI coverage—the technology finally reaching a point where it can deliver broadcast-quality results for mid-tier productions that would otherwise be priced out of sophisticated effects work.

Beyond cost-cutting: Netflix’s broader AI vision

Sarandos was careful to position this not merely as a cost-saving measure but as a creative enhancement. “We remain convinced that AI represents an incredible opportunity to help creators make films and series better, not just cheaper,” he told analysts, echoing arguments we’ve heard from AI proponents throughout the industry.

The streaming platform is implementing AI across multiple fronts. Co-CEO Greg Peters revealed that Netflix is deploying generative AI in personalization, search, and advertising, and plans to roll out interactive ads later this year. For filmmakers, perhaps more relevant is Sarandos’ assertion that “our creators are already seeing the benefits in production through pre-visualisation and shot planning work, and certainly visual effects.”

The labor question resurfaces

As we’ve extensively covered, AI adoption in entertainment remains fraught with labor concerns. The 2023 Hollywood strikes, where AI was a central sticking point, resulted in agreements designed to keep the technology under human control rather than replacing workers entirely.

Netflix appears acutely aware of this sensitivity. Sarandos emphasized that “this is real people doing real work with better tools,” framing AI as augmentation rather than replacement. Whether this messaging will satisfy industry professionals remains to be seen, particularly given the 10x speed improvement Netflix reported – gains that inevitably raise questions about workforce implications.

The timing is particularly notable. Just as the industry has begun to stabilize post-strikes, with new protocols for AI use still being established, Netflix’s public embrace of the technology for final footage represents a significant test of those agreements.

A history of quiet implementation

While Netflix positions this as their first use of generative AI, industry observers have long suspected the company was already employing the technology. Previous controversies included suspected AI photo manipulation in the true crime documentary What Jennifer Did and the notorious upscaling of a 1980s sitcom that produced distorted, nightmare-fuel imagery.

The significance of Netflix’s announcement may lie less in being their “first” AI use and more in the company’s willingness to publicly defend and promote the practice. This transparency represents a strategic shift from secretive implementation to open advocacy – a move that will likely pressure other studios to clarify their own AI policies.

Industry implications and professional response

For working VFX professionals, Netflix’s announcement crystallizes both the promise and threat of AI tools. The technology clearly offers unprecedented creative possibilities and budget efficiencies, particularly for productions that previously couldn’t afford sophisticated effects. The 10x speed improvement alone could transform project timelines and open new creative opportunities.

However, the rapid adoption pace raises serious questions about industry standards, quality control, and long-term employment impacts. If a building collapse sequence – traditionally requiring weeks of traditional VFX work – can now be completed in days with AI tools, what does that mean for VFX houses and their workforces?

The professional community’s response will be crucial. Unlike previous technological shifts that evolved gradually, AI’s rapid advancement is compressing adaptation timelines. Studios and artists must simultaneously master new tools while navigating evolving labor agreements and quality standards.

The broader context

Netflix’s move comes as the company reported strong quarterly results, with $11 billion in revenue representing a 16% year-over-year increase. The success of shows like Squid Game’s final season demonstrates that audiences remain focused on compelling storytelling rather than production methodology – a reality that may give studios more confidence to experiment with AI tools.

As we’ve noted in previous coverage, the AI debate often obscures a fundamental question: can these tools enhance storytelling while preserving the human artistry that makes content compelling? Netflix’s El Eternauta experiment represents an early test case.

And like I’ve predicted on the CineD Focus Check podcast before, Netflix really is the first major streamer to publicly embrace generative video – I think next we’ll see an entirely generated series, likely animation first.

What comes next, and how filmmakers can get ready

Netflix’s public endorsement of AI for final footage production will likely accelerate industry-wide adoption. Other streaming platforms and studios will face increasing pressure to clarify their own AI strategies, particularly as cost pressures intensify across the industry.

For filmmakers, the challenge now is determining how to integrate these powerful new capabilities while maintaining the creative vision and human craftsmanship that remain central to compelling storytelling. That’s why we have started a new course series on MZed, “The Efficient Filmmaker” – which will consist of a series of short courses that are meant to accelerate your creative work, not replace it. The first course was launched already, and two more are in post-production; additional ones are being produced as we speak. Our goal is to bring filmmakers up-to-speed with developments so they are ready for the future unfolding in front of our eyes.

The technology clearly works – Netflix’s 10x efficiency improvement proves that. The question is whether the industry can harness AI’s potential while preserving the collaborative, human-centered process that has defined filmmaking for over a century.

As Sarandos concluded, these tools are “helping creators expand the possibilities of storytelling on screen.” Whether that expansion ultimately benefits or diminishes the art form will depend largely on how thoughtfully the industry approaches this new chapter in production technology.

What’s your take on Netflix’s embrace of AI for their productions? Let us know in the comments below.