Hollywood's Three-Stage Playbook for AI

Opening

Dear reader, if I had to sum up what’s happening in Hollywood right now in one sentence, it would be this: “Fighting AI and shaking hands with it at the same time.”

On the music side, just a year ago the three major labels — Sony, UMG, and Warner — sued the AI music apps Suno and Udio for copyright infringement, calling it “theft on an unprecedented scale.” Yet by late 2025, those same labels were striking licensing partnerships with those same companies.

On the film side, right after Netflix walked away from a ₩111 trillion (~$83 billion) acquisition of Warner Bros., it turned around and bought InterPositive, a 16-person AI startup founded by actor Ben Affleck. On the surface these look like unrelated stories, but they reveal a single pattern. There’s a common structure to how the entertainment industry is absorbing AI, and today I want to unpack it.

Stage One: Litigation — “This Is Theft”

It always starts with conflict.

In June 2024, the three major labels — Sony, UMG, and Warner — filed a copyright infringement lawsuit against Suno and Udio through the RIAA (Recording Industry Association of America). The core allegation was that both companies had scraped millions of copyrighted songs without permission to train their AI models. So-called “stream-ripping”¹​ — pulling audio without authorization from platforms like YouTube — was suspected as the main way they gathered training data.

On the film side, it wasn’t a lawsuit but a strike. In 2023, SAG-AFTRA (the Screen Actors Guild – American Federation of Television and Radio Artists) walked out for 118 days, and AI was the central issue: could studios use an actor’s digital likeness without consent, and what would happen to post-production²​ jobs if AI replaced them? The strike ended with AI protections written into the contract, but both sides felt it wasn’t enough.

The first stage of this pattern is always the same: a new technology upends the existing order, and the incumbent industry fights back with legal action. When Napster opened the door to P2P music sharing in 1999, a lawsuit shut it down by 2001. But Napster’s death didn’t send people back to buying CDs. Once technology changes behavior, that change doesn’t reverse.

The same held true for Suno. Even as the lawsuit dragged on, Suno was generating 7 million songs a day — roughly the equivalent of Spotify’s entire catalog every two weeks. By November 2025, it had reached $200 million in annual revenue and a $2.45 billion valuation. The lawsuit never slowed its growth.