China fuels rush to turn AI video into an industry

China has unleashed a surge in the development of AI-generated video content, positioning the nation as a global leader in the burgeoning industry. Zhili Zhu, a prominent AI filmmaker based in Shenzhen, reports a flood of inquiries from various Chinese cities and industrial parks eager to establish AI film businesses. These appeals stem from Beijing's ambitious plan to integrate AI into all sectors of the economy, including cinema.

Local governments have responded with incentives such as subsidized rent, computing support, and tax breaks to lure AI filmmakers and startups. This mirrors China's previous industrial strategies, where the government nurtured sectors like electric vehicles, solar panels, and robotics into globally competitive markets. Consequently, China has become a hotbed for AI filmmakers, studios, and streaming platforms vying to gain an early advantage in production techniques and distribution.

While the allure of low production costs has drawn many filmmakers to AI, the industry faces potential pitfalls similar to those encountered by other state-supported sectors. As production ramps up, domestic demand may become saturated, driving prices down and stifling innovation. In the first half of 2026, over 221,900 AI shows were launched on Douyin, yet only 1,055 garnered more than 100 million views, indicating a possible overcapacity.

Notably, some filmmakers and actors are expressing apprehension over AI's potential to erode originality, copyright infringement, and job losses. Despite these concerns, the Chinese government continues to pour resources into the AI film sector. Subsidies, rent waivers, and computing support are being offered across cities like Shenzhen, Shanghai, Beijing, and Hainan, fueling a rapid expansion of AI-generated content.

The first AI film to receive regulatory approval for theatrical release, "Sanxingdui: Future Memories," is set to premiere this year.

However, the rapid growth of AI-driven content has sparked debate over copyright laws and the potential for plagiarism. While Chinese consumers have been receptive to AI-generated content, there are calls for clearer regulations to address these issues. As China solidifies its position at the forefront of AI filmmaking, the rest of the world watches closely, hoping that the nation will establish clear copyright rules to ensure a fair and sustainable industry.