AI video market has bounced back from Sora's false start

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AI video production has moved from hype cycle into a functional, financed industry. In Culver City, Promise — backed by Google, Disney, and Silicon Valley investors — is filming 'Touch Grass,' a horror film where AI overlays real-time environments on live actors using the Chinese model Seedance 2.5. Co-founder George Strompolos estimates hybrid productions cut costs by 20–50% compared to conventional shoots, potentially reducing studios' leverage over independent filmmakers.\n\nHighsfield shows how fast commercialization is happening. In eight months, the company (founded by former Snap exec Alex Mashrabov) saw its valuation jump from $1.3B to $5.4B. Annualized revenue surged from $20M to $700M within a year, driven largely by a shift toward enterprise customers who now represent the majority of revenue. Investors include DST Global, Goldman Sachs, Liberty Global, and Intel.\n\nThe scale is larger than most realize: Netflix used AI in 300 of its 1,000 titles by 2026. Ron Howard is collaborating with AI studio Obsidian on a documentary at 30–40% cost savings. Oscar winner Joel Hynek (Predator) calls it comparable to the film-to-digital transition. Resistance remains from directors like Nolan and del Toro, and distribution conflicts are emerging over revenue splits.\n\nFor AI practitioners, this signals real production adoption, not experimentation. Chinese models like Seedance 2.5 are competing directly on Hollywood sets, and the enterprise customer surge at Higgsfield suggests B2B AI video has crossed the chasm.