AI in Hollywood: The Dispute Between Netflix, Nolan, and Payment Responsibilities

      The dispute over AI in Hollywood used to focus on the future, but this month it shifted to the present. Within a few days, a studio, a director, and a union each established their positions, which do not align. Collectively, these actions reveal an industry that has already embraced the technology, now merely debating the terms of its use.

      The director's caution

      Christopher Nolan is not one to engage in exaggeration. His latest adaptation of “The Odyssey” is leading the box office and is also the first feature completely filmed on Imax. Thus, when he speaks about technology, Hollywood pays attention. When interviewer Hugo Travers asked if AI could be a contemporary Trojan horse, Nolan chuckled, stating, “I think AI is a Trojan horse that everybody knows the Greeks are inside,” according to TechCrunch. He described it as “a transparent horse, it’s made of glass.”

      Nolan noted the public sentiment, remarking, “I’ve never seen a technology advancing so rapidly so completely rejected by the public.” He highlighted the youth who easily dismiss AI as subpar, calling it a healthy skepticism. As the president of the Directors Guild of America—which secured AI protections in its recent contract—he has reason to appreciate this sentiment.

      The studio's revelation

      Nolan's caution coincided with a more straightforward revelation. In its second-quarter earnings report, Netflix disclosed a surprising statistic: generative AI influenced approximately 300 of its films and shows this year. The company portrayed these tools as beneficial to creators, accelerating effects and pre-production tasks. According to Variety, this number encompasses titles across its 2026 lineup, not limited to a few experiments.

      For many viewers, the mere figure was startling. The subtlety of its impact is significant; AI didn’t emerge with a single hit but infiltrated numerous productions while the credits remained unchanged. Netflix has been strengthening this capability, having acquired an AI film startup earlier in the year.

      The non-existent actress

      Then there was the introduction of the performer. In early July, the UK studio Particle6 announced its plan to feature an AI-generated “actress,” Tilly Norwood, as the star of a film titled “Misaligned,” where she fittingly plays an AI.

      SAG-AFTRA, the American performers' union, dismissed this development. In a statement, it asserted that Norwood “is not an actor.” She was produced by a software trained on numerous performers “without permission or compensation.” The union's stance emphasized that creativity should focus on human involvement.

      The theme of consent recurs repeatedly. SAG-AFTRA has also advised its members to opt out of Meta’s Muse imaging tool, which could convert public photographs into AI-generated images. This mirrors the music industry’s struggle with AI models that learn from artists who never consented to such use.

      The payment debate

      Beneath the cultural conflict lies a financial question: if a studio employs a synthetic performer instead of a human, should they compensate for that choice?

      SAG-AFTRA believes they should. The union has proposed a “Tilly Tax,” requiring studios to pay a royalty into a union fund whenever they opt for an AI actor instead of a real one. Studios are opposed, arguing that an entirely fictional character is different from a digital replica of an actual person.

      The implications are greatest in animation. A study by CVL Economics estimated that generative AI could eliminate or absorb around 118,500 jobs in US film, television, and animation by 2026—more than a fifth of the workforce. Jeffrey Katzenberg, co-founder of DreamWorks, has been even more drastic in his prediction, stating that AI could eliminate 90% of animation artist jobs.

      The unions are firmly positioning themselves. The Animation Guild has secured contract language compelling studios to negotiate over AI’s effects, while SAG-AFTRA’s 2026 agreement includes numerous AI stipulations. The broader apprehension about AI and job security is particularly pronounced in animation, where the craft and the paycheck are intertwined.

      The true conflict

      Connecting the events from the week reveals a pattern: the technology is already integrated into the industry. The debate has shifted from whether to use AI to who approves its use and who benefits from it.

      This is why Nolan’s analogy is fitting—A Trojan horse is only effective if brought inside willingly, and Hollywood has already done so with 300 Netflix projects and an AI character in the spotlight.

      The subsequent developments will be determined by contractual negotiations, not screenplays. Can human performers maintain their involvement and share in the profits? This is the pressing question the industry can no longer ignore. As Nolan cautioned, the situation requires a critical perspective. Everyone can see what lies within.