Stop me if you’ve heard this before: A technology company draws the ire of the entertainment industry for unauthorized use of its intellectual property.
TL;DR
- AI video technology like OpenAI's Sora has rapidly advanced in 2025, surprising Hollywood.
- Consumers embrace AI video for fan fiction and content creation, unlike Hollywood's cautious stance.
- Hollywood faces options: legal battles, partnerships with AI firms, or licensing its intellectual property.
- The future may involve authorized AI remixes and personalized content, requiring new legal standards.
It may bring to mind Napster and music labels. Or YouTube and television networks. Now the latest chapter concerns AI companies and Hollywood at large.
The past few months have cemented 2025 as the year Hollywood faced the brave, new world of AI. The industry may look longingly upon the now-seemingly quaint controversies surrounding the use of AI voice technology in Oscar-nominated films like The Brutalist and Emilia Perez earlier this year .
Hollywood’s chief antagonist is OpenAI, the AI company with over 800 million users and rapidly approaching a $1 trillion valuation. From attempting to invoke the film Her with an unlicensed replica of Scarlett Johansson’s voice for its voice assistant, to the no-holds-barred release of its text-to-video service Sora, OpenAI’s “ask forgiveness, not permission” approach has Hollywood on its heels.
Let’s examine AI video’s arrival into the mainstream, the creative and monetization possibilities it offers, and Hollywood’s potential next moves.
AI video’s watershed year
Generative video has made tremendous strides in 2025, blurring the lines of reality. There are a host of companies developing AI-powered video tools beyond OpenAI. Google’s Veo tool is also lauded for its hyper-realism, although the tech giant has taken a more responsible approach, limiting the technology to paid subscribers and blocking most attempts to bypass likeness and IP, although users have still found workarounds.
Other large tech companies are also invested in this space, including Meta’s AI Studio and TikTok’s Symphony Avatars (as well as OmniHuman from TikTok’s parent company, ByteDance). A host of startups, including Pika, Runway, Luma, and Pollo AI, are also competing. The point here is that Sora is just the tip of the iceberg.
Hollywood, to its credit, saw this moment coming. The writers’ and actors’ strikes of 2023 dragged on in part because of concerns around use of this technology. They secured guardrails around script generation and consent and compensation for using an actor’s likeness. What they may not have foreseen was a company like OpenAI embodying the renegade spirit of Napster, bypassing studios and talent agencies and launching with few limitations on voices, likenesses and IP use.
Remixed stories, new worlds
The public’s response to OpenAI’s Sora 2 release and its accompanying social network has diverged from Hollywood’s. Consumers have embraced this new form of content creation, with Sora climbing to #1 on the App Store and staying there for weeks. Sora even hit 1 million downloads faster than ChatGPT.
Sam Altman, co-founder and CEO of OpenAI, says Sora is an opportunity for creators to deepen their connection with fans and generate “interactive fan fiction.” In my time testing out Sora over the past month, it’s been highly entertaining to place my avatar in many of my favorite worlds, casting spells as a Dungeons and Dragons inspired mage or wielding a lazer sword inspired by the Jedi. I’ve been impressed at the ease and speed of creation — the only limitation becomes your imagination.
It’s an arbiter of what’s to come with deepfake video, democratized content creation tools, and dramatically lower production costs for creators. It gives independent creators an incredible canvas to bring their vision to life. Creating epic scenes has historically been reserved for big-name studios and VFX houses. Now creators can level up their productions without breaking the bank.
It also opens a new outlet to express fandom. For decades, fan communities have demonstrated a strong desire to “remix” their favorite stories, whether through fan fiction, recutting trailers, or fan art and comics. The flooding of Sora with remixes of actors and animated characters (albeit unauthorized) demonstrates fans’ hunger to play a more active role in how stories are told. Consumers increasingly expect to generate their own content on demand, from video clips using tools like Sora to songs with services like Suno AI. Hollywood must adapt and cater to this need, or risk missing out on a new breed of fan engagement opportunities.
Future options: legal action, collaboration, or granting rights
In Hollywood, where top-grossing films are now almost always prequels, sequels, reboots, or based on existing IP, AI video carries an immense opportunity. Fans already have deep connections to these creations, and giving audiences the ability to “remix” them would present new monetization and community-building opportunities. This would require a fundamental shift from Hollywood, which has tightly controlled who gets to tell its stories. The right controls and governance would be a critical prerequisite for any sanctioned Hollywood participation.
Hollywood has a number of paths it can explore as it navigates the world of AI video generation.
Legal Battles: It's undeniable that Sora has thrown copyright law into disarray. With scenarios ranging from Pokémon engaging in illegal activities to deepfakes of celebrities like Bryan Cranston, which were subsequently restricted, Sora features numerous portrayals that no production company or agency would ever approve. Although we've heard whispers of legal challenges and discontented studios and agencies, no actual lawsuits have been initiated as of yet. This doesn't preclude future legal action, much like the situations with Napster and YouTube. Previously, major film studios took legal action against Midjourney, alleging that the AI startup's image creation software infringed on copyright.
The reluctance of studios to directly confront OpenAI might arise from recognizing the significant role AI-generated video will assume in their future operations. (Following its unbridled debut, OpenAI has also shown greater willingness to resolve issues.) Studio executives and representatives undoubtedly perceive financial gains from appropriately licensing voices, appearances, and intellectual property. This emerging income stream is particularly attractive considering the ongoing drop in cinema attendance and the shift away from traditional cable, alongside escalating expenses for creation, promotion, and publicity.
Linking up (Partnerships)
Because developing core AI models demands substantial funding, collaborating with technology firms might be a more practical approach than in-house development. Consider a feature on Paramount+ allowing users to generate their own SpongeBob shorts using a white-labeled AI video creation service. While OpenAI's bold initial move could deter industry cooperation, numerous AI video generators, as previously noted, would likely be open to partnerships. The music sector offers a comparable strategy: Universal Music Group is teaming up with Stability AI to jointly create advanced AI music production instruments.
Licensing
Studios, some of whom might regret introducing loss-making streaming platforms to rival Netflix, may be hesitant to establish yet another technology-driven venture with uncertain profitability. Monetizing their intellectual property through a platform like Sora could prove profitable, similar to their current syndication deals with networks and Netflix. However, Hollywood would require AI firms to institute protections and oversight measures that these companies have been unwilling to embrace.
Hollywood's situation has been significantly impacted by the swift progress in AI video during 2025, occurring sooner than anticipated. It's crucial to establish a mutually advantageous approach, whether through legal or business negotiations, immediately. While I'm very optimistic about this technology, I foresee numerous conflicts between Hollywood and Silicon Valley in the future.
Looking ahead, I envision a future where prominent actors, musicians, and copyright holders permit authorized deepfakes and remixes of their work, sparking a new era of brief, customized memes, mini-films, and song excerpts. We, as viewers, will utilize these much like we currently use GIFs and stickers. Eventually, this will herald a completely new stage of widely personalized content—if a show you desire doesn't exist, it will be generated for you instantly.
New legal standards are essential and will be established to ensure artists and rights holders receive payment for their creations. However, it's important to recognize that in the near future, AI-generated or AI-assisted content could very likely constitute the bulk of what we consume visually.
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