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Major traditional film studios are facing multi-million-dollar projects that can take years to complete, but China is building an AI-backed “short-film factory” that can produce hundreds of films per day, supported by large-scale government involvement.
The short-film industry—often described as vertical-format content for the “TikTok generation”—has shifted from amateur clips to a more industrial model. With AI intervention, the segment is increasingly positioned as a high-volume business, with market expectations reaching tens of billions of USD in the near future.
Vigloo, a Korean short-film producer cited in the report, illustrates the operational change. The company allocated up to 30% of its budget to automated processes. As a result, production time fell from three months to one month, while costs dropped to one-fifth of prior levels.
Even within Vigloo, AI agents are taking on core tasks such as scriptwriting, which are then reviewed by human producers. The approach enables more releases and faster genre experimentation, spanning romance, action, and fantasy, with reduced risk.
Vigloo’s CEO Neil Choi said the main competition is not traditional studios, but China’s large short-film ecosystem, where AI is supported by national resources. The report highlights that short films are treated not only as entertainment but as a business category promoted and protected by local governments.
Examples include support in Shanghai’s Pudong district, where startups can receive up to 300,000 yuan (about $44,000) for computing costs. Wuhan has introduced specialized loans for the industry, while other regions offer tax incentives, direct subsidies, and access to modern GPUs.
Professor Haiyang Li of Rice University said China’s short-film and AI animation market reached about 100 billion yuan (roughly $14.6 billion) in 2025. Yuki Bi, CEO of Helios Worldwide, projected that by 2030 the industry could be worth $16.2 billion in China and $9.5 billion overseas.
Major technology companies are also participating. In March, iQiyi launched Nadou Pro, a tool connecting production companies with actors willing to license their likeness for AI-created content. Kuaishou and Tencent have also run AI short-film competitions and technology grants. ByteDance has reduced the cost of creating AI videos through Seedance 2.0.
The report describes China’s model as prioritizing quantity over quality, contrasting with the approach of K-drama studios that focus on a small number of megahits. Instead, Chinese studios use high-frequency production with low budgets and aim for extremely large profit margins.
Data from 36kr shows that in January this year, China released more than 470 AI-assisted short films per day. By combining AI content generation tools with recommendation algorithms and existing advertising ecosystems, platforms such as ByteDance can manage the process from scriptwriting to distribution to end users.
Yuki Bi said this model can help address cost inflation in traditional film production. Releasing many smaller projects may offer more stability than relying on a single large bet.
Rapid growth has also intensified legal and rights debates. Nadou Pro faced backlash from stars who said they had not signed agreements to allow their images or voices to be used for AI content.
Regulators have begun to respond. The Cyberspace Administration of China (CAC) has issued draft rules intended to address copyright issues related to AI.
Damien Yeo, an analyst at BMI (Fitch Solutions), warned that for an industry dependent on speed and scale, unresolved intellectual property issues could become a future bottleneck—particularly as legal standards tighten.
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