'Just look at Kodak or Blockbuster': Former Disney and DreamWorks chief Jeffrey Katzenberg says Hollywood must embrace AI or risk irrelevance

Hollywood legend Jeffrey Katzenberg, who helped lead the revival of Disney animation and co-founded DreamWorks, is optimistic about artificial intelligence (AI). Dismissing fears surrounding the technology, he said AI could help studios make more films and lead to new forms of storytelling.

In a lengthy post on X, Katzenberg wrote, “As the barriers and the costs come down, more films will get made, not fewer. Studios will get to take more risks. There will be more seats at the table, and very soon entirely new forms of storytelling.”

Katzenberg argued that animation was dismissed as a niche part of the entertainment business in the 1980s.


“Today it is one of the most beloved and profitable forms of storytelling in the world. In live action, filmmakers like Steven Spielberg, James Cameron and Peter Jackson embraced new visual tools not as shortcuts, but as instruments, and expanded cinema in the process,” he wrote.

Katzenberg compares AI resistance with the phonograph

Katzenberg compared the current resistance to AI with protests against the phonograph in the early 1900s.

In 1906, American composer John Philip Sousa published an essay titled The Menace of Mechanical Music. He warned that the phonograph could become “a substitute for human skill, intelligence and soul.”

“Sousa's fight was not really about the machine, it was about money. The machines were playing his compositions, and the men who built them weren't paying him a cent. His campaign helped create the Copyright Act of 1909. He did not stop the technology. He changed the terms under which it could use his work,” Katzenberg wrote.

He also pointed to the arrival of sound in movies about a century ago, when tens of thousands of musicians lost their jobs.

“The work of one composer and one orchestra was recorded for a film that went into thousands of theaters,” he wrote.


“Those pit jobs did not come back. And yet (this is the part we have to be brave enough to admit), sound gave us the movie musical, the modern score, sfx, sound design, audio engineering, and an art form vastly larger than the one it disrupted.”

According to Katzenberg, the lesson is that resisting technological change can risk irrelevance.

“Just look at Kodak or Blockbuster. To embrace technology is to open doors of new possibility. Just consider Apple and Netflix,” he wrote.

What Katzenberg learned at Disney

Katzenberg recalled his time leading Disney's animation division in the mid-1980s, when producing an animated movie was a lengthy and expensive process.

A single movie consisted of around 125,000 individual hand-drawn and painted cels, which were photographed one frame at a time. “Every revision carried a cost measured in months,” he wrote.

He said the studio eventually turned to computer animation and co-developed the Computer Animation Production System (CAPS) with Pixar, replacing hand-painted cels with CGI.

He cited The Little Mermaid, Beauty and the Beast, Aladdin and The Lion King as examples of how technology expanded what artists could do.

“Technology didn't diminish the craft, it expanded the canvas. It gave artists more room to create,” Katzenberg wrote.

A decade later, Disney released Pixar's Toy Story, demonstrating that a fully computer-animated film could also carry emotional weight.

At DreamWorks, Katzenberg said the studio made the difficult decision to move away from hand-drawn animation and become a fully computer-animated studio.

“It was the right thing to do, but it was not without pain. It cost talented people their place in an industry where they had worked their whole lives. Some made the leap to the new tools and did the finest work of their careers. Some never did,” he wrote.

AI and the difference between reasoning and creativity

Katzenberg said he asked one of the leading AI models about the difference between reasoning and creating, and that its response changed how he thinks about the technology.

He described reasoning as analytical and evaluative, while creation is generative and produces something that did not exist before.

“Reasoning is what Silicon Valley has been perfecting. Creating is what Hollywood has been practicing for more than a century,” he wrote.

Katzenberg argued that AI can currently “deduce, evaluate, optimize, and pattern-match brilliantly,” but said there remains a distinction between creating something and being creative.

“What it doesn’t yet have is those things that make us human: empathy, devotion, serendipity, the kind of creativity that comes from a person trying to say something only they could say,” he wrote.

He added that AI could eventually close that gap.

Katzenberg's vision for Hollywood and AI

Katzenberg said AI developers and Hollywood's creative community need to work together, with artists involved in the development of the technology.

“The right path forward includes them by design, with credit, with consent, and with compensation. Build this with the storytellers. Not on top of them,” he wrote.

At the same time, he said Hollywood needs to accept that AI is not going away and focus on establishing the terms under which it will be used.

He argued that AI could lower the cost and barriers to filmmaking, allowing studios to take more risks and potentially creating new forms of storytelling.

“As the barriers and the costs come down, more films will get made, not fewer. Studios will get to take more risks. There will be more seats at the table, and very soon entirely new forms of storytelling,” he wrote.

Katzenberg acknowledged that he does not have all the answers but said he expects creative opportunities to expand as AI develops.

“The north has the new tools. The south has the creative soul. The best future will draw on the best of both worlds,” he concluded.