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.
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.
Unleashing a world of remixed storytelling
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.
Paths forward: Litigation, linking up, or licensing
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.
Litigation: There’s no denying that Sora has put copyright law in the woodchipper. From Pokémon committing crimes to deepfakes of actors like Bryan Cranston, which were later clamped down, Sora is rife with depictions no studio or agency would ever sign off on. While we’ve heard rumblings of litigation and angry studios and agencies, no lawsuits appear to have been filed to date. That’s not to say they won’t come, as they did with Napster and YouTube. Major studios previously sued Midjourney, accusing the AI startup of copyright infringement for its image generation tool.
Studios’ hesitations to go head to head with OpenAI may stem from a realization of the importance that AI-generated video will play in the future of their businesses. (OpenAI has also been more amenable to addressing concerns after its wild west launch.) Studio heads and agents undoubtedly see dollar signs from proper licensing of voices, likeness and IP. This new revenue source is especially appealing given the continuing decline of movie theater attendance and cord cutting, as well as rising costs for production, marketing, and advertising.
Linking up (Partnerships)
Given the significant investments required to develop foundational AI models, partnering with tech companies may be a more reasonable solution vs building internally. Imagine an interactive component to Paramount+ where you can create your own SpongeBob mini-episode, powered by a white-labeled AI video generator tool. OpenAI’s aggressive opening shot may make the industry less inclined to play ball with them, but as covered previously, there are plenty of AI video generators that would likely welcome teaming up. The music industry provides a similar playbook: Universal Music Group is teaming up with Stability AI to co-develop professional AI music creation tools.
Licensing
Studios, some of which may harbor regrets launching unprofitable streaming services to compete with Netflix, may not be eager to stand up another tech-enabled service with questionable margins. Licensing their IP to a service like Sora could be lucrative, just as they do with syndication today to networks and Netflix. But Hollywood would need AI companies to implement safeguards and controls they have been reluctant to adopt.
The rapid advances in AI video in 2025 have brought matters to a head for Hollywood, faster than anyone might have expected. The time to iron out a mutually beneficial strategy, whether it’s in a courtroom or boardroom, is now. I’m extremely bullish on this technology, but I expect a lot of Hollywood vs. Silicon Valley battles ahead.
In the near future, I could see a world whereby well-known actors, musicians, and rights holders allow licensed deepfakes and remixes of their content, creating a new wave of short-form, personalized memes, short-form movies and song snippets. We, the audience, will use these the way we use GIFs and stickers right now. In the long term, this will usher in a whole new phase of mass personalized content—if there isn’t a show you want to watch, one will be created for you in real time.
New legal precedents will—and must be—set because artists and rights holders need to be compensated for their work. But make no mistake: AI-created or creator-AI-augmented content may very well become the majority of what we are watching, in the not-so-distant future.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
