Ben Affleck On AI & The Future of Hollywood

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If It Looks Like a bank… — The CFPB just ruled that any digital service that handles a significant number of transactions (eg. Apple, Paypal) should be subject to bank-like oversight. 

AI Boon Continues — Nvidia beats Q3 earnings but falls short of highest estimates. Forecasts show continued AI-driven growth of 70% for Q4 as new chips begin to ship.

Monopoly Game Over — The DOJ seeks to force Google to sell its Chrome browser and Android mobile OS businesses to address illegal monopoly concerns.

AI Manhattan Project — A congressional commission has proposed a public-private partnership to develop AGI systems, and plans to tighten China import tariffs.

Adani Charged — India’s richest man, billionaire Gautam Adani, faces federal charges over alleged bribes for contracts and concealing payments from US banks.

Trump Picks — Cantor Fitzgerald CEO Howard Lutnick is tapped for Commerce; PE billionaire Marc Rowan emerges as Treasury frontrunner; and Interior pick Doug Burgum could boost AI data centers through energy policy, with two $100B+ projects. Gary Gensler reportedly plans to step down as SEC chair on Jan 20.

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GlobalFoundries — Finalized a $1.5B chips subsidy to expand its semiconductor production in NY and VT. The company is investing $13B over 10+ years in US sites serving various tech sectors.

Rain AI — Sam Altman is reportedly leading a $150M round at ~$600M for the chip startup, hoping to position it as a potential rival to Nvidia. Altman was a major investor in Rain’s 2022 $25M seed round.

Promise — The LA gen AI entertainment studio and production software startup founded this year, raised an undisclosed amount from Andreessen Horowitz and veteran Hollywood exec Peter Chernin.

BlackRock Bitcoin ETF — The IBIT options launch saw $1.9B of exposure on day one with 4.4:1 calls to puts ratio, amid Bitcoin hitting $94,700.

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THE HOTTEST THING IN TECH
Ben Affleck On AI And The Future of Hollywood

Ben Affleck went viral this week for arguing that AI won't replace human creativity in filmmaking anytime soon, despite actors and writers' concerns. Also, Andreessen Horowitz just backed an upstart film studio, Promise, that shows promise by dint of its’ fully embracing generative AI technology. It’s becoming increasingly clear that the financial potential of generative AI in the media and entertainment industry is significant. A recent McKinsey estimate puts it at between $80 to $130 billion in value. If Affleck is right that AI's role in Hollywood will be more about augmenting creativity than replacing it, this likely makes companies like Promise the fastest horses to back for investors exploring the intersection of AI and entertainment.

The Automation Debate 

Ben Affleck’s comments at CNBC‘s delivering Alpha 2024 investor summit indicated he believes AI will instead lower filmmaking costs and barriers to entry by automating laborious and less creative aspects of the process. He compared AI to a craftsman who can imitate techniques but can’t replicate true artistic "taste." People pay attention to the actor/director because he has a history of correctly predicting industry shifts, including forecasting the rise of streaming services over 20 years ago. 

But on the other side, a viral Reddit post highlighting the replacement of an entire news station team with AI has sparked widespread concern about the rapid automation of creative industry jobs. The post by a laid-off news station worker claimed TEGNA, one of America's largest local news companies, has adopted AI tech capable of directing shows, operating audio boards, and managing graphics. This potentially threatens tens of thousands of production jobs across the U.S. Comments on the post revealed similar job displacement trends in other industries, including film. The post raises concerns about the potential economic consequences of widespread automation if companies replace workers without creating new job opportunities, leading to a shrinking consumer base for their products. 

Can AI Help Indie Filmmakers?

How true is Affleck’s suggestion AI is transforming the film industry by lowering the barrier to entry for filmmakers? AI tools are already being used to automate time-consuming post-production tasks like color grading, scene detection, and transcription. Emerging technologies are also streamlining pre-production with virtual location scouting and project management tools. The future holds joys like AI-powered cameras adjusting settings autonomously and advanced tools automating complex VFX and 3D animation. It will make things easier for low-budget films, but it’s also likely to lead to at least some technical (if not creative) job displacement elsewhere, not to mention the very real potential for homogenized creativity. 

Can AI Replace the Studios and Middlemen?

Promise is a disruptive independent studio fully embracing generative AI technology in the film and TV production process. Founded by industry veterans from Fullscreen and YouTube, it plans to produce content using its "MUSE" proprietary AI system. The studio has secured funding from prominent investors, including Hollywood mogul Peter Chernin's North Road Co. and Andreessen Horowitz. Promise is seen as uniquely positioned to establish an entirely new format alongside live-action and animation. Promise and other studios like A24 that are fully dedicated to leveraging gen AI and have a tech base to do so, have a significant advantage over the larger studios that are only just beginning to explore the technology.

Spines is Lit and AI Music Gets Real 

A similar company in literary publishing is Spines, an AI-powered self-publishing platform that aims to disrupt the legacy literature industry. Spines offers a faster and cheaper alternative to traditional publishing, claiming to complete tasks like editing, cover design, and distribution in weeks rather than months. The company has already published 1,700 books and is experiencing rapid revenue growth at a rate of 1,000%. Spines also recently raised $16M in Series A funding led by Zeev with previous backers Aleph, M-Fund, and LionTree also participating. 

In the music industry, Suno just released V4 of its AI music generator, with new features for upgrading older tracks and AI-powered lyric assistance. Most importantly, Suno also added new features for allowing users to upload their own audio and lyrics to generate songs. These updates reflect the growing demand from professional producers and musicians for such advanced AI tools to enhance their work. 

It’s notoriously hard to predict entertainment trends, but it’s increasingly clear that AI means business in Hollywood, and it could be presenting many great opportunities.

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