Related: Warner Bros. Discovery rebuilds its ad business around AI agents.
A growing number of filmmakers say artificial intelligence has reached the point where it can cut the cost of making animated films and shows by as much as 90 percent, a claim that, if it holds, would upend the economics of an entire industry. Reporting from Bloomberg captures animators describing budgets collapsing from hundreds of thousands of dollars to a few thousand, a shift that promises a flood of cheaper content while stoking fears of mass layoffs across Hollywood. The same tools that excite some creators terrify the workers whose jobs they may replace.
The numbers being cited are startling. One example reported is the studio WndrCo, which has produced roughly half hour shows for as little as a few thousand dollars using AI, work that by traditional methods could run into the hundreds of thousands. A drop of that magnitude does not just trim a budget, it changes who can afford to make professional looking animation at all, opening the door to small teams and individuals who could never have commanded a studio pipeline. For producers chasing margins in a brutal streaming market, the appeal is obvious and immediate.
That appeal is exactly what alarms the people who do the work. Animation and visual effects are labor intensive crafts built on the skills of modelers, illustrators, storyboard artists, compositors, and animators, and many of those tasks are precisely the ones generative AI is now able to approximate. Surveys of industry executives have flagged 3D modelers, storyboard artists, and illustrators as among the roles most exposed, and by some widely cited estimates more than 100,000 of the roughly 550,000 film, television, and animation jobs in the United States could be disrupted by AI tools. Whether disrupted means eliminated, redefined, or simply made more precarious is the question hanging over every department.
The fear is not abstract, because the industry was already contracting before AI arrived in force. A stretch of mergers, cost cutting, and studio consolidation between 2022 and 2025 thinned the ranks of creative workers, and recent layoffs at major studios, including cuts tied to Marvel, have been read by some former employees as an early sign of a deeper AI driven shift rather than an ordinary downturn. When a workforce is already anxious and shrinking, a technology that promises to do the same work for a tenth of the cost lands less as opportunity than as threat.
Unions have responded by trying to draw lines around how AI can be used. Animation and visual effects labor groups have pushed for protections in contracts and public campaigns against AI driven job cuts, arguing that the tools should augment artists rather than replace them and that workers deserve a say in how their past work is used to train the systems now competing with them. Those fights echo the broader battles over AI and creative labor that have run through Hollywood since the writers and actors strikes, and they are unlikely to be settled quickly.
The optimists in the field make a different case. Some animators argue that cheaper tools will not erase jobs so much as change them, letting a single creator do what once required a team and enabling a wave of films that simply would not have existed under the old cost structure. In that telling, the technology lowers the barrier to entry and expands the total amount of work being made, much as cheaper cameras and editing software once did, even as it disrupts the established way of doing things. The history of creative industries offers examples of both outcomes, jobs destroyed and new ones created, often at the same time.
What is not in dispute is that the cost curve has bent sharply, and an industry cannot ignore a change of this size. If even a fraction of the claimed savings prove real and reliable, studios will face enormous pressure to adopt the tools, and the workers who built the modern animation pipeline will bear the brunt of the adjustment. The likely near term result is not a clean replacement of people by machines but a messy, uneven transition, with some roles vanishing, others transformed, and a fierce argument over who captures the savings.
For audiences, the most visible effect may simply be more animated content arriving faster and at lower cost. For the people who make it, the stakes are far higher, and the coming months will test whether the industry can absorb a 90 percent cost collapse without an equivalent collapse in the careers that have long depended on the old math.
Related on Entrelligence: Google’s Nano Banana 2 Lite and Omni Flash models, Warner Bros Discovery rebuilding ads around AI agents, and Big Tech’s $2.7 trillion AI bill.