Hollywood Studios Now Demand AI Plans From VFX Vendors, Weta FX Chief Says

Hollywood's major studios have flipped from banning generative AI outright to refusing work from visual effects vendors that lack an AI plan, according to Daniel Seah, CEO of Weta FX, the effects house behind "The Lord of the Rings" and "Avatar."

Seah laid out the reversal to press in Taipei on Friday, after Weta FX signed a partnership with the Taiwan Creative Content Agency (TAICCA) at Taiwan Creative Content Fest (TCCF). Weta's clients, he said, are mainly the Big Four studios and the streaming platforms.

The shift took roughly 18 months. "We also got the memo from each of the studios, especially from their legal departments, saying that there is no such scenario that you can use any of GenAI for any of our work," Seah said of early last year. By mid-year, several clients allowed limited use, provided Weta secured pre-approval and worked with a small number of approved companies. Around the turn of the year, the questions changed: studios began asking about Weta's AI strategy, mostly to calculate how much money the technology could save.

Since the third quarter of this year, Seah said, the message has hardened: "It's, 'If you don't have an AI strategy, don't bother to work with us.'"

Why Weta turned to Taiwan

That pressure pushed Weta to find a partner that could speed up its GenAI work. It found one in Taiwanese animation and VFX outfit Moonshine Studio, a collaborator for around six months. Seah said AI had become a national strategy in Taiwan on the strength of the island's semiconductor industry, and Moonshine, free of the client restrictions Weta faces, had moved quickly as a result.

Seah said Weta has no intention of using AI to replace its artists or employees. "It's more like to enhance and increase more workflow for us," he said.

Weta chief technology officer Kimball Thurston said the company builds its own AI models for modifying and recreating the world, "not necessarily the like ChatGPT-type of model." The Moonshine work will likely target the artist layer — what the AI industry calls the harness, "which I think is the worst name they could have chosen," Thurston said. The goal is a tool for refining stories across "whole timelines of long-form content rather than just 20-second TikTok videos."

What about outside models and security?

Weta also uses external video models such as Kling AI and ByteDance's Seedance where clients permit. "You kind of have to," Thurston said. "It's not every studio allows us to, but they also came onto the scene and killed a bunch of competition, fundamentally." Security rules require such models to be hosted outside China — achievable, he said, because ByteDance now operates globally.

Under the partnership, TAICCA and Taiwan's Ministry of Culture will identify young talent for Weta FX, which may offer internships at its offices in Wellington, Melbourne and Vancouver. Seah said Weta recently announced it is likely to open a representative office in London as well.

"There's a Taiwan contingent at Weta in Wellington already," Thurston said, noting those artists predate the deal and are "integral members of the crews." Weta has no footprint in Taiwan. Seah called the island the ideal base for exploring Asia, citing three-to-four-hour flight times to Southeast Asia, Japan and Korea, government backing, and a pool of engineers and storytellers. Thurston said Weta has also held talks in Thailand and Korea, and pointed to a build-out of immersive experiences across Asia, possibly via Singapore. "It's more, to me, about market enablement than it is about any particular location," he said.

TAICCA chair Sue Wang called the deal the biggest Taiwan has struck in the content industry so far. "I think this is a key opportunity to move from technology hardware to technology applications – that is, software," she said.

Provenance, power and the actor

Thurston said Weta started an open-source project around 18 months ago called the Rongotai Model Train Club, named after an area of Wellington. It tracks refinement and LoRA training and writes that usage into image metadata; anyone defining a model must state which datasets were used. The effort dovetails with work at the Visual Effects Society's Technology Committee and at MovieLabs.

Weta also won a data center design award for the Southern Hemisphere in the past year, for a cooling system that uses no water and is more power-efficient. Thurston criticized industry rivals: "I hate that a lot of companies are building up gas, basically gas turbines to power data centers. I think it represents bad engineering, speaking as a computer scientist."

What does this change for filmmakers? VFX supervisor Sheldon Stopsack said the new tools must fit Weta's existing pipeline, including motion capture. "We want to be able to kind of shape the world the way the filmmaker envisioned it, we envisioned it, and, you know, have this creative control ultimately at the end of the day with any of these technologies," he said.

Thurston added that performance remains the draw. "People still want to see the big star performing," he said. "They may be performing as an ape, or they may be performing as a Na'vi, or some other crazy creature that gets created, and that creature may be created using some technique, but people want to go see the actor perform."