AI Film Studios in China Draw Calls From Cities Eager to Host Them
Two years ago, filmmaker Zhu Zhili chose Shenzhen, the southern Chinese tech hub, as the home of his AI film studio. This year, his phone has been ringing with calls from government officials and industrial park managers across the country. The message, he says, is almost always the same: bring your AI movie business here.
The pattern is familiar to anyone who has watched China’s industrial policy in action. Cities competed fiercely to attract solar panel makers, then electric vehicle plants, then robotics companies. Now a similar race is underway for AI video production, a young industry that barely existed a few years ago but is growing fast enough to attract official attention.
What makes AI filmmaking attractive is cost. Producers say the price of generating video with artificial intelligence has fallen dramatically. China Central Television reported that in the first half of 2026, the cost of making an AI-generated short drama dropped from roughly 5,000 yuan per minute to just a few hundred yuan. For a medium where budgets were once dominated by cameras, crews, locations and actors, that is a seismic shift.
AI video tools work by generating moving images from text prompts, reference photos or short clips. A creator can sketch a scene, describe it in words, and let software produce footage that would previously have required a full production team. The results are not always ready for the big screen, but they are increasingly good enough for short-form dramas, advertising and social media content, where speed matters more than polish.
The economics are reshaping who gets to make films. A single creator with a laptop can now produce content that once needed a studio. That lowers the barrier to entry, but it also raises questions about how the industry will handle copyright, likeness rights and the livelihoods of the crews that traditional production employs.
Cities see more than artistic value. An AI video cluster brings together computing power, data centers, software talent and content companies, all of which fit neatly into local plans to build a digital economy. Industrial parks offer office space, tax breaks and access to the large-scale computing resources that AI video generation demands. In return, they hope to host a new export industry, much as they did with solar panels and electric cars.
Whether AI video follows the same trajectory as those sectors remains to be seen. Solar and EVs succeeded partly because the products were standardized and globally in demand. Films and dramas depend on taste, language and culture, which travel less easily. Chinese AI short dramas have found audiences at home, but winning viewers abroad is a different challenge.
For now, the money and the momentum are real. Zhu Zhili and others like him are weighing offers from cities that want to be known as the next center of AI cinema. The competition is likely to intensify as the technology improves and costs keep falling. What was once a niche experiment is becoming an industry, and local governments are determined not to miss it.