Artificial Intelligence Is Changing Production Companies, Here’s How

In the world of commercial production, AI is moving from hype to hands-on. While some see it as a threat and others are sceptical, there’s no denying that there’s been a quantum leap forward in generative AI video tech in recent months. And that has inspired a new breed (or generation, if you will) of production companies that are harnessing AI as their creative raw material.

Speaking to some of the new companies that have emerged in the gen AI video boom, as well as a fair few familiar names from the world of commercial production that have adopted and adapted, we set out to find out what generative AI is really doing for the world of independent production right now. And with that comes a caveat: given the breakneck speed at which the tech is moving, this may well be out of date within a month.

So buckle up!

The Tech, the Tech, the Tech

In the world of generative artificial intelligence, Kent Boswell of recently launched Australian production company AiCandy tells me the measure of progress for AI video is Will Smith eating spaghetti. It’s based on the acid-trip-gone-horribly-wrong nightmare fuel video from 2023, which sees the Fresh Prince sprout new fingers and merge with the noodles which writhe around his plate. The same prompt in 2025 creates something that’s shockingly advanced, much more realistic and stable - and far less psychically scarring.

Gen AI video platforms like Sora, Runway and Luma have released several major updates, and this May, Google released Veo 3 which allows for greater consistency and can generate native audio that’s synchronised with the video. This leap forward in technology has, in turn, created greater appetite for AI video from clients.

“There was definitely a tipping point a couple of months ago where although generative, AI video was a thing, it was nowhere near production-ready," says James Hilditch, founder and creative director at video production company BearJam, which has developed an AI offering. "You could do fun things, and it might work for a shot or a quick moment, but actually that seemed that it suddenly just tipped over for us. Now the quality is good enough to put out."

His colleague, Trey Farley, a director and creator and former camera operator, says that this evolution has translated into an upswing in the jobs coming in and interest from clients. Over the past two months he says it’s gone from ‘a trickle’ to a ‘steady flow’.

For a more visceral demonstration of how dramatically things have improved, just speak to the team at Silverside AI, the AI innovation lab spun out of agency Pereira O’Dell. In November last year, it helped Coca-Cola remake its classic Christmas campaign, 'Holidays Are Coming'. As one of the biggest brands to take gen AI advertising to the mainstream, it was a pioneer in the space . Founder Rob Wrubel chuckles at that word, recalling the fate of the pioneers on the Oregon Trail.

“Literally, they step out in Texas on the Oregon Trail, and all the pioneers get killed by hurricanes, arrows, whatever,” he laughs as he looks back on the reaction they had when they first popped their heads up. “So I do feel like we have had that pioneer spirit, like we'll figure out some way through this. Yeah, but it has been super fun and exciting.”

His partner in crime at Silverside, the inimitable PJ Pereira, chimes in. “When we started to do it, people said we were either crazy or idiots or traitors. Now they’re like, you are right.”

As much as many have been taken by surprise by the speed of AI video’s development, PJ says its trajectory tracks with what he expected to see given his experience with other advertising tech-driven revolutions, like digital.

The rate of improvement is exhilarating but challenging to keep up with. Jan De Loore at Belgian production company AiCandy (not to be confused with the Australian company of the same name) shares an example: earlier in the year, a project for Oxfam involved some labour-intensive, complicated lip sync challenges. And just weeks after completion, Google’s Veo 3 launched, with its advanced lip sync capabilities, rendering their technical efforts obsolete. “As soon as our production is finished, it happens that a new tool comes on the market, which could have halved our work efforts,” reflects Jan.

A New Gen-eration of Production Companies

As the technology has improved, allowing filmmakers to wield greater control and to produce shots with more polish, inevitably a new breed of production companies is popping up. Some are existing prod cos that have pivoted or have set up AI-specific labels or rosters. Companies like The Sweetshop have made AI available to all of the directors on their roster, allowing them to level up to become directors who are well versed in both traditional filmmaking and AI, as well as launching AI creative studio The Gardening Club, with a roster of AI artists. Imagine This launched a separate banner, Made By Humans about a year and a half ago, which includes a carefully curated roster of AI artists backed up by its production know-how. Kode, also in the UK, has been putting AI to work as a tool to improve productivity and lessen the financial and time burden of unpaid pitches.

Of course there are also companies that have spawned entirely from scratch in response to the AI gold rush. In Belgium, AiCandy emerged when motion graphics expert Jan won a prompt battle hosted by experienced film producer Hans. Since launching in January, it has had an explosion of interest from clients, and has worked on over 10 projects.

Meanwhile in Australia, another company bearing the same name, AiCandy, but completely unrelated, has recently launched, headed up by experienced commercial producer Kent and creative Marcus Tesoriero. The seeds of their company sprouted - where else? - over a beer at Cannes Lions 2024 as the pair saw the wall-to-wall AI panels and talks, and figured they didn’t want to be left behind and that their combined experience put them in a strong position to meet clients’ high expectations. Their phones, they say, haven’t stopped ringing since their launch at the end of July and they already have two projects greenlit.

“The reaction we’ve had since launch confirms we’ve identified a hole in the market,” says Kent. “We were certainly first to market in Australia, and arguably probably one of the first in the world. The offering is so unique… We’ve spent the last six months scouring all corners of the globe looking for the best AI film directors around the planet and we’ve got them signed exclusively to us here in APAC. It’s allowing us to go to market with an incredible offering, where we can guarantee we’re going to be able to create really compelling stories with beautiful film techniques that are highly crafted and going to engage the audience.”

AiCandy Australia's 2025 showreel

And then there are the exciting outsiders. If AI truly is a democratising force, it figures that we’d see companies pop up that have little previous connection to the advertising industry. That’s sort of true for Anima Studios, a company made up of four friends - Riccardo Fredro, Nick Montori, Ruggero Ghinzelli and Florin Smolevschi - from the same Italian town. While one of them is a sound designer who has worked for years in commercials, that’s not true of the rest.

Anima began life as a TikTok account for the friends to create, at first, AI images and, later, video of their sci-fi stories. Amassing over 600,000 followers, 4.4 million likes and tens of millions of views, they quickly found an audience. But as TikTok had no suitable monetisation options in Belgium and Italy, where the Anima crew is currently based, they had to find other ways to make money with their newly acquired skills. And so they’ve found opportunities in commercial production, as well as helping a major holding company visualise ideas in pitches - and they also create trailers for movie directors looking to generate funding for their film ideas. They’ve been doing the rounds in recent weeks with a spec ad for Lays, which has sparked interest and debate on LinkedIn.

Clients Are Coming

The tech’s getting there, the companies are eager, but what about clients? It’s no secret that there’s a divide between the brands that are proactively experimenting with and embracing AI and those who are continuing to avoid it. And speaking to these varied companies, another interesting trend comes to light: it’s start-ups and small-to-medium sized companies and organisations that are most enthusiastic, and least likely to be put off by legal grey areas of using open source gen AI platforms. They tend not to have the cautious legal teams of multinational brands. Jan at AiCandy in Belgium recalls creating a campaign for a major European car client only for an anxious legal team to suddenly pull it.

“We feel that it's mainly the smaller clients that are more prone to taking the risk and see the opportunities. They have always been limited by budgets, but now, with a rather low budget, they can create stunning commercials,” says Jan. “ They're not bound to agencies, no international legal restrictions and so on and so on. So they are more agile.”

Case in point, AiCandy's campaign for Belgian dairy brand Inex. Whatever its budget, it certainly didn't stretch to hiring stunt cows to jump out of helicopters.

What’s something James at BearJam has observed too. “I think smaller start-up brands are more comfortable. Perhaps they don't have in house legal teams that are saying, ‘hang on, let's just pause on this’. They're just like: this is great. We can do more, bigger stuff for our budgets. And I think they're happy to kind of just move quickly and get it done and not necessarily get too caught up in the usage rights and issues like that,” he says, though he notes he’s aware of major brands that are starting to push the envelope, so things are ‘gradually shifting’.

As we’ll see later, not all ads that use generative AI are 100% generative AI. The brands that made a PR play of being ‘first to market’ with gen AI video ads took a risk and were as much leveraging the power of conversation as they were the power of artificial intelligence. However, beyond the headline-grabbing controversies, a number of clients have been quietly making use of gen AI tech and talent to pull off challenging shots.

It’s also true that AI allows companies with more modest marketing budgets who would normally be limited to very domestic-scale ideas to embrace bigger, more outlandish concepts. While AI commercial production could represent a race to the bottom on cost, the other way to look at it is that it opens the doors for a whole new raft of potential clients .

“We’ve opened the door to brands and clients that possibly could never, in their wildest imagination, dreamt of having an advertising campaign because they couldn’t afford it. Now the can, which is fantastic,” says Kent of Australia’s AiCandy.

Storytelling is Everything

Anyone who’s followed the conversation around gen AI video will be familiar with the term ‘slop’ - low effort, poorly produced dross flooding social feeds. The companies we speak to have strong feelings about ideas, storytelling skills and filmmaking knowhow as crucial differentiators.

“I think it has major implications for the whole industry. I think we will be flooded with crap, so to speak, from now on, more and more. I think that's maybe one of the main issues going forward; how are we going to have our brands going to differentiate themselves, and how are they going to stick out?, “ ponders Jan. “I believe, at least for now, that, yeah, a good idea and vision is still crucial."

Those producers and directors with extensive experience in film argue that a deep understanding of the language of film - the storytelling techniques, the technical specs, the aesthetics - is key to creating quality AI video.

Referring to a slide in their pitch deck, Kent says, “In theory, I could hand you the keys to an F1 fighter jet and go, ‘Hey, jump in, take it for a spin’. I know I would crash and burn. And so it's the same thing with AI. If AI is in the wrong hands, of people that don't understand film craft, don't understand film language, don't understand when to hold for that extra two frames, to drop that moment in comedy… it's just going to be vanilla.”

However, that storytelling ability may be found in surprising places. PJ Pereira is convinced that AI is breaking down the old boxes that creative people have been forced into. To demonstrate, he shares a provocation - is writing prompts for generative AI an exercise in copywriting (it uses words, afterall) or art direction (you’re trying to guide an image)? A conundrum, indeed, if the industry needs to cleave to those highly specific job roles.

PJ and Rob reveal that in their team at Silverside, they pull together a diverse range of specialists, and over time even the technologists have stepped forward to direct.
PJ refers to an editor who has joined the team. His storytelling has been honed over decades, sure, but he didn’t sit in the director ‘box’. “We hired an editor that has 20 years of experience in editing, and for 20 years the only thing that he was allowed to determine was where a shot starts and when a shot ends, and what goes before and after,” he says. “That’s the only thing that he can influence… the guy is a real filmmaker.”

Jan at AiCandy echoes that sentiment. “It opens up possibilities for people with another background, with no knowledge of filmmaking, and I see that as a positive, because it also applied to myself, “ he says. “I'm a motion designer. I made some films, but I'm not really a cinematographer, so I always had some ideas, but I cut myself off from the idea to produce these things, because I don't like large production crews. The thing I hate about film production and advertising film production is the fact that it's so hierarchical, and all tasks are split between several units and people, but now It's kind of any idea can be visualized and created."

A Complex Production Challenge

Before delving into the realities of AI filmmaking, for most people the impression is that it’s as simple as button mashing a prompt onto a keyboard and popping out a fully formed film. But the realities are much more complicated.

Alongside the ability to tell a story and evoke and provoke emotion, there are some core ‘traditional’ producing skills that are also vital for good quality AI filmmaking.
For one thing, the workflows are often incredibly complex. Toby Walsham at Made By Humans shares a glimpse of a workflow of an AI shot, and it’s a filigree of lines and layers. Each AI video tool has its own strengths and weaknesses - and that changes with every update - and each project requires its own carefully considered stack of programmes and platforms.

“I think it’s very comparable to early VFX days,” says Toby, who spent a significant amount of time in the world of VFX before moving to live action. “It’s not everyone that can do it. There is definitely a misconception that everyone can be an AI artist. It isn’t the case. We signed people that we thought would be great AI artists and we dropped them since you need to be a storyteller and a creative, but also very tech savvy. AI is not just prompting and writing something amazing. It’s not copywriting."

The producer’s ability to bridge the gap between brand and talent is another crucial skill which might be even more important with AI. That’s because generative AI - for whatever medium - is iterative. It’s a tool whose outputs are determined by probabilities. That means that it’s extremely rarely (dare we say, never) a case of inputting a prompt and finding the first output to be usable. Crafting shots that have consistency and that adhere to brand demands and creative standards requires not just creative talent but someone steadying the ship.

For the team at Kode, their explorations of AI have revealed just how crucial their very human skill of producing really is - and where it might sit alongside the radical new AI talent popping up.

“We’re acutely aware of the fact that there’s lots of talented individuals who know how to do the prompting and operating the tools, but they don’t all have the decades of experience that we do have within this market and within this category. We're great at finding and developing talent, pairing them with clients and agencies, and managing a strategic, creative and production process that sees good commercial results,” says Jack Goodwin, executive producer.

Which brings us to one of the most interesting tensions around the way that AI will play out in production. Is it a force that breaks down barriers and democratises filmmaking - or does it make that singular creative vision and production skill all the more important? And the answer seems to be: both? Kind of?

Anima is an enticing example of a company that’s emerged from pure creative passion. “We started crafting our own original content,” says Anima co-founder Riccardo Fredro. “So we realised, hey, this gives you the opportunity to tell stories and to do things that we always were passionate about, like science fiction or creating a musical artist and so on and so forth. And so we started exploring both the ad space and our own originals. And then along with it came other opportunities.”

A Race to the Bottom or Raising the Bar?

Cost is a misapprehension that everyone we speak to raises. Creating engaging stories with high production values and a high level of brand control requires skill, creativity, time and, yes, money. While they acknowledge that artificial intelligence can be used to churn out low quality, low cost assets (slop, see above), they argue that it can also be used to raise the creative bar.

The production complexities and time consuming iterations combined with the creative talent needed to create good film using AI means that it’s not necessarily cheap - however it might allow clients to get more from their budgets.

Small to medium clients might find they suddenly have access to big, outlandish ideas when previously their budgets limited them to simple, domestic-scale ideas. Big clients might find their budgets might stretch to more films and assets than their big budgets would previously achieve.

Toby reveals that while the budgets he was receiving last year were low, as the technology improves and confidence grows, he’s seeing more of those big six figure budgets up for grabs for AI producers and filmmakers.

Riccardo at Anima uses the example of a campaign for a consultancy where they were able to use AI to turn consultants into spec op spies. Far beyond the usual B2B marketing budget. “We wanted to give those same tools and that same access to that quality, also to smaller companies,” he says.

For the evangelists at least, they don’t see a race to the bottom, but a creative launchpad to the stars. “From our point of view it’s bloody exciting because we’re unlocking new opportunities that could never be done before because there have always been a myriad of reasons holding us back. Now there’s almost no excuse to not do the best work of your career now,” says Kent.

AI? Live Action? Why Choose?

One thing that becomes clear is that when it comes to deciding between AI or more traditional production methods, it’s not all-or-nothing. Many of the companies we’ve spoken to talk about stacking different methods and technologies and choosing the right tool for the job. So some heavily AI jobs still need a bit of old school compositing or colour grading - and some seemingly ‘trad’ jobs are actually making use of a sprinkling of AI to achieve challenging or budget-unfriendly shots.

Toby at Made By Humans reveals that he’s been talking with other production companies to help them achieve certain shots or elements. “We never planned on being partners with other production companies, that wasn't like our intention,” he laughs. “But a lot of production companies, and I think rightly so, are going, ‘we don't do AI because that's not our expertise, but telling stories is’, and they need partners like us.”

It’s become a cliché at this point to refer to AI as ‘just another tool’, but perhaps, once the hype has calmed that’s exactly what it will become. An option, just like stop motion or CG animation or live-action filmmaking.

Silverside hit the headlines with their 100% AI work but even these leaders in the field are now bringing together remote live action filmmaking with AI in a current job. Just as PJ is convinced that AI will blur or totally destroy the boundaries between job roles, perhaps we'll also see less of a distinction between work that's live action, animated or AI as techniques bleed into one another.

What Does the Production Model of the Future Look Like?

The million-and-a-bit dollar question is: what will the production company model look like in the age of AI? People are trying different things, and it’s unlikely we’ll end up with one standard approach. The likes of Made by Humans, the Australian AiCandy and The Sweetshop are betting on shifting the traditional prod co model of signing/repping directors to signing a roster of AI artists. At BearJam, they talk about pairing directors with AI artists, tailored to the requirements of a particular jobs.

However, those we speak to suggest that the gentlemanly way the industry approaches signing and repping directors in specific markets may not easily transfer over to AI artists who often transcend boundaries.

Then there are small nimble studios like Anima or the Belgian AiCandy, which take the whole project on, and can take on concepting and script writing functions. (Although check out their AI short 'Advertising Professionals in 2030' for a particularly bleak look at where they wryly suspect even the AI creators might end up.)

Then there’s the free-flowing ‘laboratory’ approach of the likes of Silverside, where different specialisms are brought together and invited to push into new spaces. PJ is all for breaking down models and structures in order to allow AI to truly liberate talent. “We industrialised the creative process and we somehow made ourselves believe that industrialising the creative process was a romantic idea, “ he says. “That’s dumb, That’s uncreative.”

With so much changing so fast, it seems that this is the perfect time to not only experiment with technology but with business models and organisational structures too - and as more and more new AI-focused production companies emerge we’re going to see even more new ways of working too.