• Higgsfield AI made a sci-fi action thriller called "Hell Grind" starring AI actors.
• The movie cost around $500,000 to produce.
• I went to a screening to see how it held up.

For a brief moment toward the midpoint of the AI-generated film "Hell Grind," I caught myself experiencing something unexpected: genuine emotion.

As the male lead, Roco, gazed at a photo of his recently kidnapped love interest, he flashed back to memories of them growing up together in an orphanage. The sadness and yearning felt real.

The sensation didn't last.

Mid-flashback, Roco and his AI-generated costars began laughing in an eerily synchronized fashion, their eyes peeled wide open. As I sat in New York's Metro Private Cinema this week, scooping up handfuls of popcorn, the uncanny valley of AI came roaring back.

Generative AI has crept into a variety of corners of the entertainment business this year, spooking many creatives who worry what it could mean for their jobs. While post-production teams are turning to the technology for de-aging and other effects, some actors in short dramas are already losing out on roles to AI characters. The shift is a top concern for the actors' union SAG-AFTRA, which approved new contract language this week that pushes producers to bargain over the use of synthetic performers.

"Hell Grind," which takes AI usage to the max, sprang up in May at the Marché du Film in Cannes (a side event that's not the famous Cannes Film Festival). The brainchild of startup Higgsfield AI — which runs an AI platform for creatives, brands, and marketers — it was conceived as a way to show the tech's potential as more than just a tool for making short videos. The company, which crossed a $1 billion valuation earlier this year, spent around $500,000 to produce its 95-minute film, with much of its budget going to computing costs. While AI regularly shows up in bits and pieces of Hollywood productions, "Hell Grind" is the highest-profile film made entirely with AI-generated visuals.

Higgsfield tapped a group of in-house creatives and outside filmmakers who used highly specific text prompts (typically around 3,000 words) to generate around 100 hours of content, which was edited down. The company did not use AI to write the script, except for a few short filler moments, which Higgsfield's CEO, Alex Mashrabov, told me he thought were noticeably less effective in the film.

The result is a visually impressive movie with a passable plot line, landing somewhere between a video game and an effects-heavy project like "Planet of the Apes."

"It's a new workflow, and it's also very important for us so that we show to the world what's possible," Mashrabov told viewers at the screening this week. "The production process looks different where it's actually possible to go back and iterate with AI and deliver exactly the emotion which the creative director was envisioning."

The company is releasing portions of the film on YouTube and plans to open source its workflow, production process, and prompts in the coming weeks.

At various points during "Hell Grind," I was taken out of the story when a character did something that just felt … off. The way Roco held a slice of pizza in one scene looked like it was his first time encountering the food, for example. The synthetic children in the movie generally creeped me out, and the AI-generated voice work didn't always feel consistent (one character seemed to flip between a British and American accent, for instance).

Still, it was hard to shake off the feeling that talented AI prompters may soon be coveted players in Hollywood.

While I wouldn't expect to see AI actors or writers playing a big role in the making of films like "Tár" or "One Battle After Another," it feels like this technology will be hard to resist for budget-sensitive executives angling to speed up movie production. That's especially true in genres like action and sci-fi, where visual effects budgets can be a big constraint. And the technology may open doors for independent filmmakers who have grand ideas but small budgets.

"Budgets and opportunities are not equally distributed across the world," Mashrabov said. "Hopefully, this will spark the next generation of creativity."

• AI has turned a corner in Hollywood as studios adopt it for production, marketing, and visual effects.
• Elsewhere, startups are raising money to tackle every stage in the production cycle.
• Check out nine pitch decks AI startup founders shared with Business Insider.

AI is starting to transform Hollywood, whether filmmakers and audiences are ready or not.

AI has turned a corner in Hollywood as major studios increasingly adopt it to gain efficiencies in production, marketing, and visual effects.

Elsewhere, AI startups have been raising millions of dollars from venture capital firms on the promise of changing the legacy Hollywood film and TV business.

The tools they are building are being used across the production cycle. Some, like Moonvalley, are enhancing special effects. Others are promising to help with marketing, content distribution, and content discovery.

It's a challenging time for Hollywood. Budgets generally aren't what they used to be, and studios know they need to do what they can to make projects faster and cheaper. Enter AI.

Netflix and Amazon have talked about how they're using AI to pull off elaborate special effects and improve the viewing experience. Lionsgate is partnering with startup Runway to train an AI model on its library. Others in Hollywood are using AI but not talking about it.

At the same time, many are worried about tech giants using AI to appropriate their IP. Studios have taken issue with OpenAI's Sora generating videos that encroach on their copyrighted characters. Disney and Universal sued Midjourney, accusing it of using tech to rip off Star Wars, Minions, and more.

Studios must also be sensitive to talent's fears of being supplanted by AI as well as audiences' attitudes. A YouGov survey in early October found viewers were mixed on the use of AI. People were most accepting of AI being used to translate subtitles into other languages (64% for), but least accepting of the idea of AI characters replacing human actors (65% against).

How are AI founders pitching investors and Hollywood insiders on their vision of the future?

Business Insider has interviewed the founders of startups behind tools to disrupt traditional TV and filmmaking. They shared the pitch decks they used to raise capital.

Read 9 pitch decks AI startups used to raise millions to disrupt Hollywood:

Series B

• Moments Lab, a French company whose tools index studios' video libraries and create new videos from raw footage: $24 million
• Neosapience, a synthetic voice and video platform: $21.5 million

Series A

• Papercup, a startup that promised to scale dubbing: $20 million

Seed

• Wonder Studios, a UK firm that uses AI to extend IP and create original works: $12 million
• StorReel, a startup that's making short dramas with interactive AI characters: $9 million
• Metaphysic, which uses AI to make realistic deepfakes: $7.5 million
• Filmustage, which uses AI to analyze scripts and do other pre-production tasks: $1.5 million

Pre-seed

• Strada, a platform that promises to streamline the production process: $1.9 million

Other

• Fable Studio, which landed Amazon backing to let creators make their own animated shows: undisclosed

• Micro dramas, the Asia-born craze that's exploded in the US, has a new fan in Hollywood.
• Franchise producer Tommy Harper has a new app that he's pitching as the "HBO" of micro dramas.
• Read the pitch deck, shared exclusively with Business Insider.

Micro dramas are entering their Hollywood phase as new players aim to give the format the star treatment.

The latest example is Tommy Harper, a prolific film producer whose credits include "Star Wars" and "Top Gun: Maverick."

Harper is going small for his next act. He's launching VeYou, an app for the made-for-mobile soaps that originated in Asia and have taken off among women viewers.

Harper raised an undisclosed amount of seed funding for VeYou from lead investor S32, a venture firm led by Google Ventures founder Bill Maris, whose other investments have included 23andMe, Impossible Foods, and Nest.

Harper wants to make VeYou the 'HBO' of micro dramas

Micro dramas — also called verticals and mini dramas — are known for being low-budget productions with wild plotlines.

Newer entrants like Harper are trying to evolve the format, using AI-driven special effects to lend a cinematic feel.

VeYou plans to offer action, romance, and drama titles, both licensed and originals made by Harper's own studio, Tiny Verticals. The first original will be "Love Under Fire," an action romance starring vertical drama star Kasey Esser, who wrote the series alongside Harper.

"We're going to ramp up the quality level and the storytelling," Harper said. "We're going to be your HBO in the space."

VeYou has secured distribution on Google TV and Google Play, with distribution on Apple's iOS to follow. It'll also use marketing channels like TikTok and Meta's platforms to attract audiences.

VeYou is adopting the low-cost, viewer-pay model common in the vertical space. The series will cost $100,000 to $250,000 to make. Harper said licensed series will cost viewers $4.99 apiece and originals will be $10.99. Other payment options and advertising will follow.

How VeYou plans to compete

Harper is aware of the challenges facing micro dramas. They cost a fraction of a traditional feature-length movie, but often lose money because of the high cost of marketing. VeYou is a startup without massive financial backing.

"I'm competing with the big Chinese companies that are throwing tons of money at this, so we have to be very, very strategic, and we have to make things that are good quality," he said.

Harper plans to work with people with large social followings to help market VeYou. He's also in talks with brands to fund verticals and help market them in exchange for product placement.

Other Hollywood players have delved into micro dramas, which streaming consulting firm Owl & Co. estimates generated $1.4 billion in the US in 2025. Fox Entertainment invested in Holywater, a Ukrainian company behind the micro drama app My Drama, while Disney gave micro drama app DramaBox a spot in its accelerator program.

Harper sees micro dramas as a chance for more Hollywood jobs

Harper said he was excited about verticals' ability to test concepts that could turn into TV shows or films, while helping employ talent as traditional Hollywood work becomes scarcer.

"It is extremely hard for young talent to get involved in TV and film right now," he said. "And this is a place for them to do it."

Harper knows some in Hollywood look down on micro dramas. He said he got similar reactions when he started working in TV. He believes attitudes will change as new players get involved.

"I had people call me going, 'I don't understand why you're doing television. You know, you do big movies,'" he recalled. "I know we have to make better stories on this platform. That's what we're going to do."

Here are select slides from the pitch deck Harper used to raise his seed round, shared exclusively with Business Insider:

VeYou wants to elevate the micro drama format.

Its pitch deck lays out the opportunity.

VeYou says micro dramas are poised to become a $26 billion industry globally by 2030.

VeYou says micro dramas have an image problem.

The slide reads:

The format works, but the stories don't fit the culture.

Dramatic storytelling drives compulsive spending — but 57% of viewers say there's too much violence.

The content carries a real stigma and social sharing is low because of that.

VeYou wants to expand the format's appeal.

Founder Tommy Harper has had a successful career in Hollywood.

The slide calls Harper one of Hollywood's highest-grossing producers, with films that have made more than $4 billion at the global box office and include some of the industry's biggest franchises.

VeYou plans to use AI to improve its series.

This slide lays out the VeYou formula:

Premium content at scale: Made for a global audience with our network of production partners. Licensed series, dedicated studio & producer partners, and originals with AI-assisted production

Discovery: Free episodes get fans invested
Existing fan communities, talent & social media, Google TV + app store feature + distribution deals

Watch & binge: Episodic: Unlock · Share

AI learns: Scene analytics inform marketing, UX & greenlight decisions

Franchise IP: Expansion for breakout properties — films, TV & books

• Netflix co-CEO Ted Sarandos wants AI to help Hollywood make "better" movies and TV shows.
• Sarandos said AI won't move the needle by just making content faster and cheaper.
• Netflix recently acquired Ben Affleck's AI editing company, InterPositive.

Netflix co-CEO Ted Sarandos doesn't think AI slop will rule the entertainment world.

"I don't think faster and cheaper matters if it's not better," Sarandos said of using AI in a new interview with POLITICO, which, like Business Insider, is part of the Axel Springer Global Reporters Network. "This is the most competitive time in the history of media. So you've got to be better every time out of the gate."

AI startups building tools for entertainment companies and creatives — from special effects to content generation — have been a growing presence in Hollywood.

For instance, Netflix recently acquired InterPositive, an AI startup that develops tools for filmmakers, founded by actor Ben Affleck.

"My focus is that AI should be a creator tool," Sarandos told POLITICO. "The same way production tools have evolved over time, AI is just a rapid, important evolution of these tools."

Sarandos said that while AI can be useful for editing and production, good content "still requires writers and actors and lighting techs."

One category where Sarandos said AI hasn't been able to replace human talent is voice acting.

"The one thing that we find to be the most important part of dubbing is the performance. So good voice actors really matter," he said. "Yeah, it's a lot cheaper to use AI, but without the performance, which is very human, it actually runs down the quality of the production."

Still, he sees an opportunity in the voice category.

"I think what will happen is you'll be able to do things like pick up lines that you do months and months after the production," he said. "You'll be able to recreate some of those lines in the film without having to call everybody back and redo everything, which will help make a better film."