AI-Driven VFX Democratizes Filmmaking, Prioritizing Story

Deep Dive

The discussion begins by acknowledging the widespread nervousness within Hollywood regarding the impact of rapidly advancing technology, particularly AI. James Altucher posits that the film industry is a complex mechanism, and by reducing the cost of up to ten of its necessary pillars by ninety percent, the industry can achieve significant wins. He frames this not as an average business podcast, but one featuring Tye Sheridan, an actor known for roles in X-Men and Ready Player One, and Nikola Todorovic, a VFX director.

The conversation then delves into the origins of Tye Sheridan and Nikola Todorovic's entrepreneurial journey. Sheridan recounts his serendipitous entry into acting at age twelve through a public school casting call for Terrence Malick's The Tree of Life. He explains that this led him to meet cinematographer Emmanuel Lubezki, on whose film set, Last Days in the Desert, he met Todorovic. Both shared a curiosity about technology and a desire to make films, often writing scripts that were too expensive to produce due to their visual effects requirements. This led them to explore technology as a means to cut costs, initially through an interactive product in 2016 before pivoting to AI-driven visual effects.

Sheridan explains how he managed his acting career alongside his entrepreneurial pursuits, emphasizing that he did not mentally separate the two. He viewed his time on film sets, like X-Men Apocalypse, as opportunities to observe production processes, which then informed their technology development. Todorovic supported Sheridan's acting career, ensuring fundraising and development occurred during his filming breaks. Sheridan notes that while filming Ready Player One, the film's themes of digital worlds and interactive storytelling felt intrinsically linked to their startup's mission.

The narrative then shifts to the early development of their technology, beginning with a $10,000 experiment in 2016 to create a 360° VR experience using stitched GoPro footage. This led to a VR proof-of-concept that could be viewed on existing devices, not requiring a headset, which they pitched to Steven Spielberg during an audition for Ready Player One. Sheridan recounts a lengthy conversation with Spielberg about filmmaking and their startup, which ultimately resulted in Spielberg requesting a demo after the film wrapped, making him an early, high-caliber supporter.

The discussion moves to a pivot in their company's direction in 2017-2018. After exploring conversational AI for branching narratives in interactive content, they realized their greater excitement lay in using AI to make their own films more affordable. This led to a complete pivot towards what is now Flow Studio, focusing on using AI to accelerate visual effects processes.

The conversation briefly touches on the broader economic shifts in the film industry, noting that distribution has changed drastically with the rise of streaming, but financing and filmmaking methods have not kept pace. This, coupled with the advent of AI and recent strikes, suggests a significant shift is imminent within the next four to five years.

Looking at the potential cost reductions in VFX-heavy projects, Sheridan and Todorovic estimate that a $100 million film could potentially be made for $10 million in five years, distinguishing between practical special effects and post-production visual effects. They assert that while AI can significantly reduce costs, audiences will still recognize and react negatively to lazy or poorly written stories, regardless of the production method. They also express skepticism about the widespread acceptance of fully synthetic actors in major film roles, suggesting that AI's primary role will be in speeding up production processes rather than replacing human performance entirely.

The founders detail their lean operational approach, maintaining a small team and offices primarily in Eastern Europe until securing significant backing. Their seed round was led by Founders Fund and MaC Ventures, with later support from Epic, Samsung, and Horizons Ventures. They emphasize hiring individuals with overlapping skills in computer vision, machine learning, VFX, and software development, prioritizing curiosity and a willingness to learn over pre-existing expertise.

Upon launching their platform, they had a waiting list of half a million users, attracting both individual content creators and studios. Netflix was an early enterprise customer, and smaller production companies, such as a five-person team from Japan, found the software enabled them to undertake projects previously out of reach. Success stories include a TV show, advertising campaigns for brands like Red Bull, and a studio that cut down their workflow for Superman & Lois from three weeks to one week, addressing the industry's pressure for higher quality with smaller budgets and less time.

Regarding competition, they differentiate their 3D-focused approach from text-to-video tools like Sora. They explain that their platform extracts information from live-shot footage into a 3D space, providing professionals with essential control over lighting, camera, and performance, which they argue cannot be fully achieved through prompting alone. They see these tools as complementary rather than competitive.

Sheridan reflects on the interesting experience of being both an actor and a tech entrepreneur on film sets, noting that while some industry professionals were curious about his dual roles, others remained focused solely on storytelling and were less engaged with technology, despite technology's historical role in driving the industry forward. He also discusses pushback from some investors who questioned his involvement in a startup given his acting career, which he countered by expressing his interest in building the future and understanding its trajectory.

The founders admit they initially conceived of their company as a way to selfishly make their own films more affordably, but soon realized its broader platform potential. They acknowledge a naivete in underestimating the challenges of building technology and running a software company, which at times felt like a form of procrastination on their original filmmaking ambitions. They found that a lack of full understanding of the research problems, while daunting, allowed them to persevere.

The discussion acknowledges that their pivot coincided with the broader industry shift towards generative AI, giving them an advantage due to their early entry and extensive research phase. They sold their company to Autodesk, a deal that was life-changing but not publicly disclosed. They had a year-long partnership with Autodesk prior to the acquisition, finding alignment in vision and strategy, particularly with Autodesk's deep roots in 3D software and their own AI expertise.

They express confidence in Autodesk's ability to compete with larger AI companies by focusing on tools tailored for filmmakers, emphasizing adaptability and an understanding of the filmmaking process, which differs from tools designed for social media users. They believe the industry's fundamental processes will not change overnight, despite headlines proclaiming "Hollywood is dead."

Addressing the concept of "Hollywood is dead," they discuss the rise of micro-dramas and their different production models, contrasting them with efforts like Quibi. They suggest that while the market for storytelling will expand, studios may retain an advantage in marketing spend, drawing a parallel to the music industry's challenges with discovery amidst widespread content creation.

Looking ahead, Sheridan mentions his next film, The Housewife, with Naomi Watts, and his continued search for "miracle projects" that push exceptional stories forward. He and Todorovic remain committed to their vision at Autodesk, with new features for Flow Studio on the horizon. They also intend to pursue their original goal of producing films together.

The conversation touches on the paradox of increased content production and perceived unemployment among writers and actors. Sheridan recounts a discussion with George Clooney, who