AI-generated image for representation
The National Film Administration has granted a public-screening licence to “Sanxingdui: Future Memories” , a 90-minute science-fiction film produced by Bona Film Group, making it the first AI film from a major Chinese studio to receive approval for theatrical release in China. Director Cao Yiwen also premiered an AI-animated film at the World AI Film Festival in Cannes in April. “France and the rest of Europe are still watching and waiting to see whether China will introduce clear laws,” Cao said. The technology is also being used to produce films aimed at international audiences. “We fell behind in the first two industrial revolutions, so perhaps this is the Third Industrial Revolution. You use AI every day. Now get your AI Quotient. Take the AIQ test.
AI film industry faces concerns over oversupply
Beijing has a 260 million yuan fund for audiovisual technology, while its Huairou district offers computing vouchers to producers of AI short dramas. Shenzhen is providing technical support for video production, visual effects and content generation, alongside subsidised rent. Streaming platform iQIYI has also increased its focus on AI-generated content, with CEO Gong Yu saying the company is offering subsidies to some creators whose AI productions appear on the platform. The rapid increase in AI content has raised questions about whether the market can absorb the growing number of productions. DataEye said 221,900 new AI shows were launched on Douyin during the first half of 2026. Only 1,055 received more than 100 million views. AI-generated films have also faced criticism from consumers and industry participants over originality, plagiarism and the use of actors’ likenesses. I think that behaviour is completely unacceptable,” Wen, a 22-year-old AI content fan, told Reuters.
Local governments in China are offering filmmakers and startups incentives ranging from subsidised office space to computing support, according to a report by the news agency Reuters. He now says officials from cities and industrial parks across China regularly approach him about moving his business. “I am approached every day by a range of cities, from major metropolitan areas to smaller localities,” Zhu told Reuters, “hoping we can establish either technology or the company there.” Zhu, who also heads the AI-Generated Content department at China Wit Media, operates his personal studio from a shared workspace in Shenzhen with support from the city government and Hong Kong Polytechnic University. He said China’s incentives include “cheap rent, living allowance and computing support”, helping filmmakers reduce the cost of producing AI-generated content. The cost of AI short dramas has also fallen sharply. Production costs dropped from around 5,000 yuan ($747) per minute to a few hundred yuan during the first half of 2026. Pan Xiaojun, a postgraduate film-directing student in Hainan, said a conventional wedding scene that could cost about 60,000 yuan to produce cost him around 1,400 yuan using AI. “A normal wedding scene might cost me 60,000 yuan to shoot conventionally,” Pan told Reuters, according to China’s state broadcaster CCTV. “But with AI, I can bring the same surreal scene to life for just 1,400 yuan.” Local governments are even introducing different programmes to attract AI content creators. Shanghai introduced measures in May to support AI-powered micro-dramas, including computing resources and access to cloud-based AI models.
Artificial intelligence (AI) is becoming a major part of China’s film and short-video industry. Cities including Shenzhen, Shanghai and Beijing are trying to attract AI film companies by providing access to technology, cloud-based AI models, computing vouchers and financial support. The approach reflects China’s broader effort to develop domestic AI industries through local industrial clusters and government-backed incentives. For filmmakers, the lower cost of producing AI-generated video is another reason to experiment with the technology. But the rapid growth is also raising concerns about an oversupply of content, copyright, the use of actors’ likenesses and whether audiences will continue to engage with AI-generated films. When AI filmmaker Zhu Zhili was looking for a base for his studio two years ago, he chose Shenzhen for its technology ecosystem. Chinese actors have raised concerns about potential copyright violations and AI’s effect on jobs, particularly for voice performers. “Some people directly blend other people’s original characters or dance clips into AI-generated content without any credit. However, China requires AI-generated content to be labelled, although copyright rules remain under development.