Netflix has incorporated generative artificial intelligence into a television production for the first time, marking a major shift in how the streaming giant approaches visual storytelling. The technology was used in El Eternauta, a new Argentinian science fiction series, and represents a significant milestone in the company’s production strategy.

Co-CEO Ted Sarandos revealed the development during Netflix’s second-quarter earnings call, highlighting that the AI-generated footage was employed in a complex visual effects sequence. This is the company’s first public acknowledgment of generative AI use in its original content.

The generative AI was used to depict a building collapse in Buenos Aires, a key moment in the post-apocalyptic narrative of El Eternauta. Sarandos said the AI tools worked in collaboration with visual effects artists, allowing for the sequence to be completed “10 times faster” than through traditional workflows.

“That VFX sequence was completed 10 times faster than it could have been completed with traditional VFX tools and workflows,” Sarandos told analysts on Thursday, noting that the speed and quality achieved would have been otherwise cost-prohibitive.

By using AI to reduce production costs, Netflix was able to fund El Eternauta at a much lower budget than typical large-scale productions. Sarandos emphasized that without the use of AI, such effects would have been financially infeasible for a project of its size.

“The cost of [the special effects without AI] just wouldn't have been feasible for a show in that budget,” Sarandos said. “We remain convinced that AI represents an incredible opportunity to help creators make films and series better, not just cheaper.”

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Netflix’s embrace of AI follows a strong financial quarter. The company reported $11 billion in revenue for the three months ending in June, exceeding analyst expectations. Major content releases, including the final season of Squid Game, contributed to the platform’s growth.

The company also projected that its advertising business would “roughly double” in 2025, creating additional revenue to support investments in technologies like AI. “Netflix's better-than-expected quarter is a result of great content, increased pricing, and advertising momentum hitting all at once,” said Mike Proulx, VP of research at Forrester.

The announcement comes amid ongoing industry conversations about artificial intelligence and job security. Following the 2023 strikes by Hollywood actors and writers, studios agreed to terms ensuring AI tools would remain under human control and not be used to replace creative labor.

Sarandos directly addressed these concerns, positioning AI as a creative assistant rather than a substitute, “This is real people doing real work with better tools,” he said. “Our creators are already seeing the benefits in production through pre-visualization and shot planning work, and certainly visual effects.”

While other productions have used AI in more limited or undisclosed ways, such as The Brutalist, which used AI for accent refinement, and Alien: Romulus, which recreated a deceased actor’s voice, Netflix’s transparency signals a shift in industry norms.

By openly discussing its use of generative AI in El Eternauta, Netflix may set a precedent for ethical disclosure and collaborative integration of new tools. The company’s stance frames AI as a means to expand creative potential, not replace it.

Netflix censors Palestinian content

As Netflix takes one step forward in embracing AI in productions like El Eternauta, it takes multiple steps backward for its approach to Palestinian content. Though not on the official BDS Movement boycott list, Netflix has drawn grassroots pressure for quietly removing most films from its Palestinian Stories collection in late 2024.

Advocacy groups like CODEPINK launched petitions urging the company to reinstate the removed titles. Critics have also long opposed Netflix’s promotion of the series Fauda, created by former Israeli military personnel, calling it propaganda that glorifies occupation forces.

The platform faced renewed backlash for casting an Israeli actress as Mary in the upcoming film Mary, a move some argue erases Palestinian cultural identity.