China's unrelenting efforts to catch the U.S. in AI may have claimed its first significant casualty — Hollywood.
Why it matters: Technology good enough to scare even the most seasoned filmmakers is prompting a legal fight that's only the opening salvo in a broader war over intellectual property and market dominance.
- Chinese AI models that undercut U.S. rivals on price, speed and market share pose an existential threat to high-cost, high-risk industries like the film business.
- They also ship with fewer safety guardrails, especially around copyrighted material and likeness rights.
Driving the news: Seedance 2.0, ByteDance's new AI video model, generated a hyperrealistic clip of Tom Cruise and Brad Pitt fighting, prompting alarm from major Hollywood studios.
- Netflix, Paramount, Warner Bros and Disney sent ByteDance cease-and-desists over the tool.
- Hollywood groups such as SAG-AFTRA and the Motion Picture Association echoed the pushback, saying Seedance is infringing copyrights and misusing likenesses.
- ByteDance says it respects intellectual property and is adding safeguards to Seedance following the legal pressure. It's unclear whether that will meaningfully limit the tool's capabilities or distribution.
The big picture: Hollywood is leaning on copyright law to rein in Seedance, but legal pressure hasn't slowed the rise of Chinese AI models more broadly.
- Stunning stat: Chinese open-source models went from near-zero usage in mid-2024 to about a third of overall AI use by the end of 2025, according to OpenRouter.
What they're saying: The release of Seedance "feels like another DeepSeek and Sora 2 moment, where the real issue is not just model capability but who sets the default," Dan Neely, CEO of Vermillio, told Axios.
- That means China's first mover advantage could leave Beijing in control of the default regulations around AI-powered IP or copyright standards.
The bottom line: It's unclear how long pressure from big U.S. enterprises can curb China's AI ambitions.
