"Everybody is still wrapping their head around it," said Mike Mosallam, COO of production company Shadowbox Studios, in an interview with Variety as recently 2025.Rattled by the technology, Hollywood initially went on the defensive. Studios worried about their intellectual property being misused, and actors feared becoming little more than raw material for AI systems -- and made it a central plank of their strike action in 2023.Those who did experiment ran into the technology's early limitations -- six-fingered hands, mouths that didn't move right.But a floodgate opened in early March, when Netflix bought a small, little-known company -- fewer than 20 employees -- for a hefty $587 million.Co-founded in 2022 by producer, director and actor Ben Affleck, InterPositive is an AI platform designed to assist film and TV production.In early June, studio Lionsgate took a stake in Runway, one of the leading names in AI-generated video, and the two will now develop creative projects together.Days later, Google made a similar move, investing in independent studio A24.Recent ad campaigns and short films have shown that AI video -- even when it includes human characters -- has crossed a real threshold.As Runway put it in May: "In many cases, if the story is strong enough, the technology is now good enough to become invisible."According to Jamie Umpherson, Runway's chief creative officer, people are learning to use the tools better as the technology improves on a "scale that was unimaginable a couple of years ago.""There's more familiarity than there was even a year ago," he said, adding that this is freeing up creative teams to focus more on story and style.Netflix co-CEO Ted Sarandos struck a similar note when presenting the company's results in mid-July: "We're making higher quality output more quickly and efficiently than we could have using traditional methods."He said GenAI workflows have now been used on roughly 300 Netflix titles, mostly in post-production, adding: "We're leveraging GenAI for really complicated shots and sequences."'Hybrid'