Like it or not, generative AI could reshape the entertainment industry as we know it, with the rise of AI video generators like Sora 2, as well as Google Veo. Arguably, such profound AI models have already shifted the social media landscape a bit, with the rise of the Sora app, which offers a TikTok-like feed of exclusively AI-generated content. With the ability to prompt videos and feature one’s likeness, the future is about to become very interesting as AI melds with human creativity.
For investors, there’s no need to rush into an AI stock ahead of the rise of the next generation of entertainment, which may have varying degrees of AI involved in the process. And while I’m sure there’s a market for 100% AI-generated content (think the Sora videos, many of which are quite hilarious), we should also keep tabs on AI that’s not taking center stage, but perhaps embraces the role in the background.
AI Is Already Starting to Change the Business of Entertainment
Undoubtedly, it’s probably not optimal to have generative AI making content on its own without a human in the loop. While we’ll probably get to a mostly AI-generated or produced feature film at some point down the line, I think that augmentation rather than automation could be a major theme that helps content creators produce more content without losing the human spirit. In any case, accelerating some of the more intensive parts that go into a film (not writing, but perhaps post-production) might be a more practical use case of next-generation AI models.
It’s not just about movies or short-form videos meant to be consumed in a social-media-esque fashion, either. Video game developers are also bound to adopt the technology to varying degrees.
Is AI Coming for Video Games? It Arguably Already Has
Recently, hit extraction shooter Arc Raiders faced a bit of criticism from the community regarding the use of AI, specifically for voice lines, in-game enemy intelligence, and potentially more. Embark Studios, the publisher of Arc Raisers, was quite quick to go on the defensive, going on to say things like “there’s no shortcut to making great games” and that players should “assume that every game company is now using AI.”
Undoubtedly, if a game developer is using an AI tool (let’s say ChatGPT, Claude, or something of the sort) to help with their coding, there already is AI being thrown into the mix. The big question moving forward is how much more of the heavy lifting AI will do and whether augmentation will be the path forward instead of automation.
For now, AI isn’t making full-fledged triple-A titles quite yet, but who knows how long it’ll be before AI starts doing more of the heavy lifting behind the scenes.
For now, there seems to be quite a lot of resistance to the use of AI, even though it’s mostly humans who are in control. At this juncture, there are more casual games that have AI sitting at the center stage. Whether we’re talking about Courtroom Chaos: Starring Snoop Dogg or many other AI chatbot-focused games, I do think the rising tide of AI in games might be unstoppable.
Here’s How Investors Can Play the AI Entertainment Boom
Undoubtedly, there’s no AI entertainment pure-play, but there are ways to bet on the rising tide. In fact, you may already be well-equipped for its rise with a name like Netflix (NASDAQ:NFLX | NFLX Price Prediction). Now, AI entertainment represents just a drop in the bucket when it comes to streaming content.
However, how long before things change? Personally, I think staying transparent is the key to maintaining good standing with customers. And with responsible, transparent guidelines and plenty of human involvement, it’s my opinion that a firm like Netflix is bound to benefit from the rise of AI gradually over time.
Undoubtedly, the best way to avoid backlash for AI use is probably full disclosure over where AI was used and how.
Ultimately, don’t expect AI content to be the norm anytime soon. Think of it most as a supporting cast member rather than the next star of the show. Even if AI were to become good enough to steal the show, I don’t think it will, given the backlash we’ve witnessed from audiences who clearly see stigma associated with AI usage in entertainment.
At the end of the day, consumers will speak with their wallets. And if they don’t want AI content or content that has too much AI in the mix, they will probably steer clear of the content. The content producers will need to react accordingly and ensure that a level of trust can be maintained.
Such backlash is a good thing that will keep the human creative spirit alive and keep AI in its place, such that they assist, rather than replace and automate.
Top Gaining Stocks
Top Losing Stocks