Will AI Lead to More Movies? Jeffrey Katzenberg on Creative Opportunity and the Human Cost of Disruption

In a Silicon Valley office, Jeffrey Katzenberg—the film producer who once revitalized Disney animation and co-founded DreamWorks—watched an AI-generated animation clip shown to him by a tech founder. The nuance of the lighting, the composition, and the vivid quality of the footage instantly brought him back decades, recalling the shock of seeing Pixar’s short film Luxo Jr. for the first time—the moment he first felt a computer-animated character come to life.

Yet that very same day, an artist friend in Hollywood whom he had known for thirty years sent an anxious text: "Is this the end of us?"

Katzenberg’s reply was decisive: "Not at all."

Katzenberg has made animated films in Hollywood and backed tech startups in Silicon Valley. His response to his friend was not that "everyone will keep their jobs"—his own experience navigating animation's transitions saw artists displaced. What he is really arguing for is ensuring artists help design the tools and negotiate the terms of their use before those tools reshape the creative process.

Why Are Creators Pushing Back?

Many film and television creators worry that AI will turn hard-won craft into replaceable, low-cost assembly-line tasks. Katzenberg once publicly predicted that new technologies could slash the time and cost of producing world-class animation by as much as 90% within three years. That was a prediction he made in 2023; his essay does not provide data on whether it has panned out three years later, but at the time, his remarks sparked panic and outrage across the industry.

Yet Katzenberg notes that he completely understands this backlash. Over decades producing films, he routinely walked studio hallways to find brilliant artists hunched over desks, throwing out a ninth draft of a single one-second shot to draw a tenth simply because it wasn't quite right. He also spent countless hours in screening rooms watching four years of a team’s collective toil flash across the screen in minutes, knowing every contributor by name.

Katzenberg attributes this resistance to a deep love of the craft. Reading this, one must also look a step further: when a craft underpins a person's livelihood and paycheck, those concerns are far more than emotional.

New Technology Expands the Art—and Changes Who Can Make a Living From It

Addressing these creator anxieties, Katzenberg revisits two watershed inflection points in music and film history:

The Phonograph: How Composers Earned Income from Records

At the beginning of the twentieth century, celebrated American composer John Philip Sousa published his essay "The Menace of Mechanical Music," fearing the phonograph would erode live performance and discourage people from learning instruments themselves.

Katzenberg emphasizes that one practical issue in Sousa’s fight was copyright royalties—phonograph manufacturers were playing his compositions around the clock without paying him a dime. The U.S. Copyright Act of 1909 eventually established mechanical royalties, allowing composers to earn income from records and other reproductions. Sousa did not halt technological progress; instead, he reshaped the economic rules governing how new technologies use artists' work. The example shows that while technology marches on, the rights and revenue creators receive still require explicit rules.

The Talkies: New Jobs Emerge as the Orchestra Pit Empties

Roughly a century ago, the talkies arrived. Today we look back on synchronized sound as a triumph of film history, but hardly anyone remembers who bore the cost.

During the silent era, tens of thousands of musicians made a living playing live accompaniment from theater orchestra pits. Night after night, in theaters across the country, musicians poured their labor into scoring silent frames. But once film recording technology emerged, a film only needed an orchestra recorded once to play simultaneously across thousands of cinemas nationwide. The musicians' union mounted a fierce resistance, buying full-page advertisements in national newspapers that derided synchronized film as "canned music." One ad even depicted a mechanical monster savagely tearing apart a harp beside a weeping angel.

Katzenberg admits these musicians were no fools; their instincts were spot-on—those live pit accompaniment jobs never returned. Although audio recording spawned far larger audiovisual industries—movie musicals, modern film scoring, sound design, and audio engineering—it is essential to recognize that the prosperity of a new market is never automatically shared by the workers displaced from the old one. New industries generated employment, but there was no guarantee that musicians who lost their pit jobs could transition into them. The expansion of an artistic medium and the fate of individual laborers must be viewed separately.

Katzenberg points to Kodak, Blockbuster, Apple, and Netflix to remind readers that ignoring technological shifts can mean missing out on opportunities. Yet corporate survival analogies do not directly resolve how an animator who loses their job can retrain or share in newly generated revenue.

Disney Changed Its Tools, but Stories Still Had to Resonate

So where do creators caught in a technological whirlpool anchor their core value? Katzenberg recalls taking over Disney's animation division in the 1980s.

At the time, Disney animation was facing a major turning point. The production pipeline was ponderous and cumbersome: a traditional 2D animated feature required hand-drawing and hand-inking 125,000 transparent acetate cels before photographing them frame by frame. Even a minor story tweak could set production back by months. The sheer weight of this pipeline heavily constrained directors' narrative imaginations.

To break the deadlock, Katzenberg and his team dove into the Disney archives, combing through recordings, written notes, and storyboard sketches left behind by founder Walt Disney. They were struck to discover that whenever Walt talked about filmmaking, every word revolved around character, emotion, and "how to genuinely move the audience in front of the screen." Walt never defined animation as the art of the "pencil" or the "paintbrush." On the contrary, he was a technological trailblazer who spent his life searching for—and frequently inventing—cutting-edge tools to realize what he saw in his mind.

In Katzenberg’s view, while paintbrushes and pipelines can change, whether a character convinces an audience remains the central artistic challenge to solve.

Guided by this insight, Disney partnered in 1986 with Pixar—then a young Northern California startup—to co-develop the Computer Animation Production System (CAPS). This technology revolutionized traditional animation pipelines by digitizing ink-and-paint and compositing:

• In Katzenberg’s recollections, the finale of The Little Mermaid achieved new gradations of light and shadow;
• In Beauty and the Beast, blending digital backgrounds with hand-drawn characters produced the sweeping, swooping ballroom sequence that felt breathtakingly cinematic;
• In Aladdin, the immense scale of the Cave of Wonders and the flying Magic Carpet brought scenes and characters vividly to life;
• In The Lion King, the wildebeest stampede pushed dramatic tension to unprecedented heights.

CAPS overhauled the hand-drawn pipeline; the full 3D animation later showcased in Toy Story was an entirely different production method. The rise of 3D computer animation completely rewrote the industry's production paradigm. Later, DreamWorks made the agonizing decision to shutter its hand-drawn production lines and pivot entirely to 3D. Katzenberg concedes that this transition brought immense pain: many veteran artists who had devoted their lives to hand-drawn animation could not adapt to new digital tools and ultimately lost their livelihoods. While some successfully crossed the technological chasm to produce the finest work of their careers, others left the business for good. As George Lucas famously remarked, "It’s never about the how, it’s always about the why."

What Is the Difference Between AI Generation and Human Creation?

In his essay, Katzenberg explores a question that preoccupied him for months: Where lies the boundary between "reasoning" and "creating"? This distinction emerged from a conversation he had with an AI model—a thought-provoking lens for evaluating creative choices, though not something that can settle the outer limits of AI capabilities on its own.

The model proposed a division:

• Reasoning: Fundamentally analytical and evaluative. It builds on established facts, premises, and evidence, following logical paths to arrive at conclusions already implicit in the inputs. Bound by logic and truth, reasoning aims to "arrive at the correct answer," not invent something completely unknown.
• Creating: Fundamentally generative. It brings something new into being where nothing existed before. Most crucially, before a blank canvas, there is never a single "correct" answer, but rather an infinite array of plausible possibilities. Creation requires making choices that cannot be validated by logic alone; where rational deduction runs out, it must be bridged by taste, intuition, and vision.

Katzenberg uses this to distinguish the strengths of the two regions:

• Silicon Valley spent recent decades mastering "reasoning," endowing machines with extraordinary capabilities in pattern matching, induction, deduction, and workflow optimization;
• Hollywood spent more than a century practicing "creating," relying on uniquely human empathy, intuition, obsession, and serendipitous inspiration to evoke resonance.

Katzenberg uses this distinction to explain what sets them apart: while current generative AI demonstrates astounding pattern matching and optimization in generating tangible content, "generating tangible imagery" is not the same as "someone having something to express." When an algorithm produces an artwork, it possesses no lived experience, empathy, or specific intention to convey; it is probabilistically approximating patterns and structures that already exist. Human creative drive, by contrast, stems from someone trying to express something only they can say. Even so, Katzenberg acknowledges this line may shift. He concedes that AI’s pace of evolution has repeatedly shattered common assumptions—capabilities achieved today were deemed impossible just years ago, and future technical abilities may well continue to evolve. For now, this dividing line reflects the real-world gap between how current tools operate and what humans seek to express.

Katzenberg then draws an analogy from early film history: Thomas Edison invented motion picture technology, but the films he made himself were hardly compelling. It took subsequent creators like Charlie Chaplin, Harold Lloyd, and Buster Keaton to turn motion pictures into a moving art form that resonated with audiences. In Katzenberg’s view, inventing cinematic technology and turning cinema into resonant storytelling are two fundamentally different contributions. This analogy helps readers grasp the distinction between "tool capability" and "expressive intent": even when engineers build powerful new instruments, what ultimately determines whether a work touches people remains the artist's desire to communicate. This serves as the author's lens for understanding the division of labor between human and machine, rather than proof that AI can never participate in creative work.

Tools Will Enter the Industry: How Do Creators Help Set the Rules?

Katzenberg's call for creators to act early reflects his vantage point as a tech investor. Having co-founded WndrCo and backed more than 50 founders, he has watched technologies evolve from early experiments into platforms, and eventually into infrastructure that upends entire industries. He readily acknowledges he is no infallible prophet—citing the collapse of Quibi—but having witnessed this pattern of technological progression, he argues that creators must help set the rules early on, rather than passively accepting them once tools and business models have hardened into place.

Katzenberg argues that Silicon Valley and Hollywood are currently locked in an unhealthy stalemate: Silicon Valley holds powerful new instruments without the artists who can breathe soul into them, while voices in Hollywood spend their energy wishing AI would simply vanish.

In Katzenberg’s eyes, "whether to use the tools" is a false trap; the real issue is "under what terms they will be used."

He offers specific advice and appeals to both sides:

1. Advice to Silicon Valley: Bring creators to the table, respect copyright, and pay fair compensation
   The tech industry must recognize that the underlying fuel for AI models is the distilled life's work of Hollywood artists. Silicon Valley cannot build an empire on the backs of creators; it must walk beside them. He outlines three core principles: Consent (creators know and approve how their work or likeness is used); Credit (contributors receive clear, identifiable attribution); and Compensation (creative labor yields fair financial return when commercially exploited). Putting these three principles into practice on actual projects will require negotiating precisely which works can be used, within what boundaries, and how revenue is divided.
   

2. Advice to Hollywood: Stop wishing AI away, and actively define the rules of survival
   Hollywood must face reality: AI is not going anywhere. If all its energy is spent resisting, creators will forfeit their voice in shaping the protections that govern their future. Sousa didn't banish the phonograph, but he helped establish mechanical royalties. In recent labor negotiations, both the Writers Guild of America (WGA) and SAG-AFTRA secured specific provisions regarding generative AI—for instance, the WGA contract established that AI-generated material cannot qualify as "literary material" and that studios cannot require writers to use AI, while SAG-AFTRA mandated informed consent and compensation for creating and using digital replicas of actors. These existing agreements demonstrate that concrete guardrails can be negotiated for certain conditions; questions surrounding training data, other creative roles, and how revenue from future works will be divided remain on the bargaining table.
   

3. Expectations for the future: Lower barriers will bring more films and new forms
   Katzenberg closes with an optimistic forecast: as tool costs and production barriers drop, film and television output may not shrink, but multiply. Studios might become willing to take risks on diverse subjects, fresh faces could claim a seat at the creative table, and entirely new narrative forms could emerge. This remains a prediction. Even if production volumes grow, that does not mean existing jobs and compensation will increase in tandem.

To the north, Silicon Valley has built powerful new tools; to the south, Hollywood has accumulated over a century of experience moving hearts and minds. As Steve Jobs observed, only when technology marries the liberal arts do truly moving creations emerge. The collaboration Katzenberg envisions comes with a real-world prerequisite: creators must be involved in tool development and have the right to negotiate how their work, likenesses, and labor are used and rewarded. Whether movies will multiply remains to be proven by the market; the terms of engagement can be negotiated right now.