Daybreak - AI is Bollywood's cheapest new hire

Episode Date: September 27, 2026

Bollywood has been seeing tough times since Covid. Theatre footfall still haven't recovered, even as box office numbers soar, and budgets for filmmakers are only getting tighter. AI seems to have a brought a glimmer hope for some in the industry, as it slowly makes its way into every stage of filmmaking. From identifying good concepts to writing scripts, storyboarding scenes, generating entire shots, to even replacing some VFX work. Studio heads familiar with the space project shrinking crews and are already seeing timelines grow shorter. Still, it doesn't make the trade-off any less real.Tune in. Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Mark my words, we are not far away from a one-man-created blockbuster. That's what Vikram Malhodra, the founder and CEO of Abundasia Entertainment, said to my colleague Shiveka Bakshi. It's the studio behind movies like Breathe Into the Shadows, Jalza and Shredney. He is also the former chief operating officer at YECOM 18 motion pictures. And he believes that AI will turn entertainment on its head. Soamel Gandhi, the founder of an AI-native film studio called Zandu, takes that belief a step further. He told us that it's now possible for one person to make a two-and-a-half-hour film at the scale of Game of Thrones in just 10 days. He even believes that in the very near future, a 70-person film crew can become a team of seven.

All of this is big talk from the Hindi film industry, which has been in financial distress since COVID. Based on the industry estimates, nine out of every 10 films flop. The fees for star actors can take a huge chunk out of even a hit movie's economics. And producers who can't sell finance often turn to an unorganized lending market that charges 18 to 60% interest in a year. The current apparent theatre recovery also masks a problem. You see, cinema football has barely grown in 2025, which is why Bollywood is turning to AI for more than just cheaper, quicker films.

It also wants back some control over this punishing economics. That hope is changing how films get made. It is now becoming more and more possible to keep the core creative talent, the director, the writer, the editor and hand over the technical work to AI. AI can play a role in the whole value chain from a feigned idea to the final release. It can generate shots from scratch or even mix with live action for hybrid cinema. Malhothra, though, still says that the beauty of cinema lies in its connect with the audience and believes that stories must still be built around core human emotions and lived experiences.

Yet, he is intent on AI. In fact, since last year, his studio has even launched an AI content division called Ion. In February this year, it even partnered with InVidio, and AI video generation platform to commit $100 crore rupees to an AI-driven film production studio. Of course, Bollywood is not the first industry to have this reckoning. Three years ago, Hollywood's writers and actors went on historic strikes, putting guardrails around AI use in creative work by studios. Since then, the relationship between studios and creative talent has improved.

Bollywood, though, has had no such organized pushback, And so it's embracing AI anyway, pushed less by its belief in the technology and more by desperation. Welcome to Daybreak, a business podcast from the Ken. I'm your host, Chey Tjewrigev, and every day of the week, my co-host, Nickashram and I will bring you one news story that is worth understanding and worth your time. Today is Monday, the 28th of September. Vivek Anjalia is the founder of an AI studio called Amazing Indian Stories. It has built fully air-generated features and Anjalia told Shivaka that the studio's success ratio is at best 10% as an industry. But that risk has gotten harder to manage after the

pandemic. Audiences grew used to OTT content and at a fraction of the cost of a movie ticket. Warshara Amachandran, a creative producer at a leading streaming platform, explained the mat to us. She said, and I'm quoting here, I pay 500 rupees for the film ticket, 600 rupees for the popcorn, and 400 rupees for commute, with an investment of almost 1500 rupees for a two-hour film, you had better proved to me that I needed to be there. Even the Ficky EY Media and Entertainment Report from this year showed that domestic gross box office collections rose by 14% in 2025, from over 11,000 crore rupees to 13,000 crore.

That's an all-time high. But actually, admissions themselves had barely moved. Nearly 870 million, just about 1.4% more than 2024. And industry estimates suggest that fewer than 150 million Indians went to a cinema at all. That's barely one in every nine people. So, with the footfall being so flat, producers have been leaning on more expensive tickets to keep the cash flow steady. And that makes every big budget bet riskier. But Bollywood keeps making the same bet.

It assumes that audiences will pay for a theatrical release only if a star is. headlining it. So, producers put a lot of the budget behind A-listers and of course that doesn't always pay off. Take for instance, Yashraj Films Alpha, the first female-led film in its spy universe. It was released on July 3rd but it struggled to cross 100 crore worldwide on a reported budget of around 100 crore. And Alia Bhatt, who was a lead actor, was reportedly paid 25 crore out of that budget. The founder of Zanadu considers star fees to be the problem. He said that from a commercial point of view, the industry has been in trouble because star fees are very skewed. And the only way for producers to recover that money is for people to come and fill the theatre seats.

The creative producer we spoke to also agreed and pretty much said that executives are at least partly responsible for their own tough situation. You see, filmmakers need room to experiment. without betting the budget on a major name every single time. And if the industry can't refashion audiences preferences, it has to reduce the risk of its work. That's where AI comes in. More on this in the next segment. Malhotra, the CEO of Abundasia Entertainment,

wants AI to pinpoint the stories that might resonate with audiences by crunching the numbers. He said, and I'm quoting, please don't think of this as any different from evaluating millions of permutations and combinations in molecular biology. But not everyone is convinced that millions of permutations can tell what audiences want. Ancaliah, the founder of Amazing Indian Stories, says that there is no way of knowing what the audience wants.

He noted how even big studios put out flops and hits every year. He believes that the only effective way to pick films is to really identify with an idea and then pray that viewers also treated similarly. Still, AI is already becoming part of the process. Mothik Tholia, the founder of Bodhi Tree Multimedia, a content production company, explained that content creation used to be a primarily physical exercise. His team would constantly hunt for ideas on the internet or wait for writers to approach them with concepts. AI now acts for them as a first filter.

It scans scripts and trends faster than any team and what took weeks. once can now be done on a daily basis. After an idea clears those filters, the next step is visualization. Here, the team creates a tentative section-by-section structure, which then artists' storyboard with simple sketches. Now, though, image generators like Mid Journey can show a film's world without an artist sketch. The Pankar Mukherjee of Studio Blow, another AI native studio, said that he thinks 90% of the industry is using AI already for pre-visualization.

According to him, costs here are brought down to literally zero. This kind of convenience and speed does actually help teams make a real pitch to producers faster and even less than test a story with viewers before they even start filming. Before content is properly green-knit, they can create an AI version. Tolia said that before even shooting starts, a 20-minute screener film can be generated, which can then be shown to focus groups for research. Their inputs can then help with fine-tuning the script. The cost savings also pick up during production.

Mukherji described a recent ad film to Shveka. He told her that the day the team was leaving for Delhi to shoot the film, a sudden rain got everything cancelled. Now, the whole film is being made in AI at the fifth of the original budget, which was 2.5 crore rupees. But Gandhi told us that while savings depend on, on each case, they can sometimes touch as high as 85%. Take a simple slice of life live-action film like Metro Indino.

To create something like that with AI, the AI token costs can actually equal or exceed the cost of a traditional shoot. The real savings are in fantasy. The bigger the fantasy, the bigger the savings. Because AI has a major advantage over traditional VFX. Sentil Nayagam, founder of Moanim AI Studios, explained that a VFX professional with five years of experience can fix about 100 frames a day. That's 4.25 seconds of video and a typical VFX movie

has somewhere around 3,000 shots and needs about 100 to 200 people working on each and every shot. Gandhi said that the cost of VFX and effects heavy cinema can be about 3 to 10 lakh rupees per minute and the AI cost would be just 15% of that. Still, VFX is mostly here to state. A Purdue professor of computer science said that automation has been limited to individual keys so far. So say like the amount of smoke a director would want on a screen at a particular point. He believes, though, that AI could still take this kind of storytelling to a different vector altogether, which is probably why the competition in AI content is also heating up. For example, Reliance-lawned Geostar Gen. Gen.A. Media Studio this year.

It's an end-to-end AI-native content pipeline that covers, ideation, storytelling, image, audio and video. Geostar was reportedly also hiring for 75 AI native roles. Even Netflix said this year that its Gen AI workflows had been used on roughly 3,000 titles in 2026, mostly in post-production. But actually, post-production is the one stage that AI hasn't cracked yet, at least on cost. Gandhi explained that the final sound effects, music and editing are still done manually. And even though AI can help generate more options, the cost doesn't really change much because

the same people still need to be hired for these roles. So for a struggling industry, AI could be a lifeline. Savings in pre-production and production could let producers spread the same money across several projects. In fact, Anshalia thought that there's a very good chance that every Hindi film release in the last six months relied on AI at some point in its production. And while AI is changing how money is saved during production, it's also changing how money for movies get raised in the first place.

Stay tuned. Nyagam, one of the AI studio founders we mentioned earlier, called film financing a very unorganized sector. He said that producers usually borrow at 36 to 60% interest rates annually. And if a film is delayed by six months, they pay interest. That figure is contested though. Anshalia claimed that. rates are at least 18 to 24% without collateral.

60% he said would be rare. This kind of instability though is baked into the structure of Bollywood filmmaking. Loans are typically rooted through a film's special purpose vehicle or SPV, which is a company that is created for a singular project alone. Gandhi explained that because an SPV is a new entity, a loan is given based on what he assumes is the promoters credit history. Even some formal lenders, including Yes Bank, participate in this space. But short tenure in formal borrowing is still quite common.

Nyangam described producers scrambling to raise 20 lakh rupees for two or three days at 5% interest just to cover last-minute delivery costs, like remastering a film to a streaming platform specifications, for example. Tolia also said that the informal lender would not care about AI. They just look at credibility and track. back records. But when it comes to equity capital, it's a different story altogether. AI-native filmmaking might have already made it easier to raise. Gandhi said that investors gravitate to Zanadu because it's building a proprietary stack of tools and platforms. He explained that the space is attractive because AI is one of the

only ways entertainment can really scale. Still, some directors want to work by hand, though a lack of resources do make that tricky. Anshalia gives the example of Tarantino who prefers to shoot on film. He said that if a director is in a place of comfort and privilege, they can still stick to traditional methods. But for the mass market, it's not going to be much of a choice. For most filmmakers, staying off the bandwagon may actually stop being practical. That being said, even AI enthusiasts recognizes problems.

And the main among them is what it is doing to the value of an original idea. Tolia said that 8 out of 10 pitches these days are done through chat GPT. So thinking itself, he said, is becoming the most interesting skill right now. He said that his next hires will come from literature and philosophy backgrounds because they articulate prompts the best. Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription offers daily,

long-form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to the ken.com and click on the red subscribe button on the top of the Ken website. Today's episode was hosted and produced by my colleague Rachel Vargis and edited by Rajiv Sien.