Netflix (NASDAQ:NFLX) has begun using generative AI video tools from startup Runway AI to accelerate production and reduce visual effects costs in original content, Bloomberg reports.

According to Bloomberg, the New York-based startup has raised $545 million in funding and was most recently valued at over $3 billion.

Runway's AI Video Tech Draws Netflix, Lionsgate, AMC, and Disney Into Its Orbit

Netflix co-CEO Ted Sarandos confirmed that AI is now integrated into its content production workflow, helping to generate special effects more efficiently than traditional methods allow. On an earnings call on July 17, Sarandos cited speed and cost benefits of producing visual effects, including scenes in "El Eternaut," a new Argentinian drama on the platform.

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While Runway’s tools were not used for the “El Eternaut” scenes, Bloomberg says that sources close to the matter confirmed Netflix is actively experimenting with the startup's software for ongoing projects.

The growing interest in Runway’s generative video technology isn't limited to Netflix, Bloomberg says. Lionsgate (NYSE:LION) has inked a deal with the company to train an AI model using its library of proprietary content for future film applications.

AMC Networks (NASDAQ:AMCX) is also collaborating with Runway AI to visualize upcoming shows and create marketing assets before filming begins, according to Runway AI.

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"As we explore the transformative potential of AI across our business, we see powerful opportunities to enhance both how we market and how we create," Stephanie Mitchko,  executive vice president of global media operations and technology at AMC Networks, said in a statement.

AI VFX Tools Like Runway's Gen-4 and Act-Two Are Reshaping Studio Workflows

Runway's latest release, an AI motion capture model named Act-Two, works with its Gen-4 system to map human movements onto animated characters with unprecedented precision and affordability. According to Bloomberg, traditional motion capture workflows can be costly and time-intensive, while Runway's tools offer near-instant results.

The startup first gained traction in 2023 after launching a model capable of turning text prompts into short video clips, spurring widespread interest in the intersection of AI and filmmaking, Bloomberg says.

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Generative AI Startups Face Competition, But Runway Leads Hollywood's Adoption Curve

Runway is competing with giants like OpenAI and Google in the generative video space, but has more traction than most AI startups in Hollywood's production pipeline. According to Bloomberg, OpenAI's Sora product has yet to secure a formal partnership, despite months of talks with major studios including Disney.

Runway's early traction highlights how AI is increasingly reshaping production strategies across the entertainment industry.

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