Two Years After Sora's Stumble, AI Video Builds a Studio in Hollywood

An Actor Walks Through a Meadow, But the Real Set Is a Blank Sheet

In Culver City, Los Angeles, within view of the Sony Studios lot, a corner of an office is draped in white cloth to form a set. Here, AI studio Promise is filming a low-budget horror movie called "Touch Grass." As the camera captures actor Tori Thomas being chased, AI overlays a swaying meadow in real time to match his movements. The background is generated by Seedance 2.5, a Chinese-made video generation model released this month. As the actor brushes past the grass, the blades sway along with him, and the director's monitor instantly shows the composite of actor and background. With just a few clicks, the meadow can even be turned into an underground cave.

According to The Decoder, Promise is backed by Google, Disney, and Silicon Valley investors. Co-founder George Strompolos estimated that this hybrid production method — combining live actors with AI technology — costs 20-50% less than conventional filmmaking. Netflix is also connected to this trend: the streaming service has said it used AI in 300 of its roughly 1,000 titles through 2026.

Where Sora Retreated, Chinese Models Moved In

Two years ago, OpenAI was the undisputed leader in this space. When Sora's first demo debuted in early 2024, it stunned Hollywood with technology that overwhelmed the competition. But the version shown then never made it to public release. The version launched in late 2024 fell short of expectations, and as OpenAI hesitated, U.S. and Chinese rivals quickly caught up. Sora 2, which launched as a standalone app in fall 2025, failed to convert its early buzz into sustainable success and was eventually shut down. A major deal with Disney also fell through. Chinese-made models like Seedance and startups like Promise and Hicksfield have filled the vacuum left behind.

Opinions within Hollywood remain divided. Oscar-winning practical effects artist Joel Hyneck, who worked on the analog effects for "Predator," reportedly compared the shift to the transition from film to digital, calling it "an incredible possibility." By contrast, directors like Christopher Nolan and Guillermo del Toro remain critical of using generative AI. Ron Howard is co-producing an animated documentary with AI studio Obsidian, and the project's executive producer estimated cost savings at 30-40%.

Hicksfield's Valuation Quadruples in Eight Months

While Hollywood continues to debate adopting the technology, video startup Hicksfield is already generating substantial revenue at scale. Hicksfield builds its own models, Soul and DoP, while also incorporating models from OpenAI, Google, and ByteDance. The company was founded in 2023 by Alex Mashrabov, who previously led Snapchat's generative AI team. Rather than film, Hicksfield has built its presence in advertising video. It raised $400 million at a $5.4 billion valuation, with DST Global, Goldman Sachs, Liberty Global, and Intel participating as investors.

That marks more than a fourfold increase from its $1.3 billion valuation eight months ago. Annualized revenue also grew from $20 million to $700 million over the same one-year period. Notably, the customer mix has shifted: as of last January, enterprise customers accounted for less than a quarter of total revenue, but they now make up more than half. According to Mashrabov, brands like Dollar Shave Club, which previously produced a single video per campaign, now use the platform to shoot multiple marketing videos in a single day.

The AI Persona Industry Grows Too

It's not just video that's changing. An industry built around mass-producing personas has also emerged. Startup Inception Point AI runs more than 100 AI personas, each with its own distinct character. Figures like British garden expert Nigel Thistledown and DIY influencer Layla Walker come with 15-30-page "character bibles" detailing fictional life stories, designed to make them appear like real people. The company maintains over 5,000 active podcasts, and because production costs are nearly zero, CEO Jeanine Wright says the company can turn a profit with as few as 20 listeners per episode.

Similar trends are appearing in fashion and music. Agency Seraphinne Vallora creates AI models for brands like Guess, and AI avatar Xania Monet has achieved chart success on Billboard. Spotify is reportedly planning to add "AI persona" labels to such profiles going forward.

Cost Savings and Growth at a Glance

Production/Business Type	Savings/Growth
Promise hybrid live-action + AI video	20-50% cost reduction
Obsidian animated documentary (with Ron Howard)	30-40% cost reduction

Hicksfield Metric	8 Months Ago	Now
Valuation	$1.3 billion	$5.4 billion
Annualized Revenue	$20 million	$700 million

Editor's Take

What makes this story compelling isn't "who won" but "what survived." Sora shook up the industry with its demo, only to fail as an actual product. Promise and Hicksfield, meanwhile, skipped the hype and dug into production budgets instead — attaching their technology to visible costs like set rentals, set construction, and reshoots for ad videos. This is how it always goes when an AI boom cools off and then reignites: what survives isn't the flashy demo, but the numbers that make an accountant happy.

If you've ever tried putting video generation models to real production use, this pattern will feel familiar. The first few months bring demo-grade amazement — "look at this quality" — but once it comes to repeated production use, the real test is whether the tone holds steady across countless regenerations of the same background, and whether the approval process can keep up with multiple outputs a day. Hicksfield's shift from individual creators to enterprise customers reads as a signal that it has passed through that test.

Domestic marketing teams or small production houses don't need to mimic a feature-film-scale pipeline right away. But for teams that need to churn out multiple versions of short ad videos in a single day, it's worth noting that real-time background synthesis and persona-based content have already reshaped revenue models elsewhere. Conversely, for feature-length narratives or work where a director's creative vision matters most, the caution voiced by Nolan and del Toro still applies.

Two things are worth watching in the coming weeks: how deeply Chinese-made models like Seedance 2.5 penetrate Hollywood's production pipelines, and what valuation companies like Hicksfield — where enterprise customers now make up more than half of revenue — command in their next funding round. Both numbers will help gauge whether this industry has solidified into a real business, not just a demo.