Key Takeaways
- Chinese cities offer subsidies to attract AI filmmakers and startups.
- AI film production costs have fallen sharply in 2026.
- Rapid growth raises concerns over oversupply, originality and copyright rules.
Chinese cities are competing to attract AI filmmakers with subsidies and cheap computing as production costs plunge in 2026, raising fears of oversupply and leaving the China AI Video Industry awaiting clearer copyright rules.
Cities compete for AI film businesses
Local governments across China are offering incentives to attract artificial intelligence filmmakers, studios and startups as Beijing pushes to expand AI across the economy. The measures include subsidized rent, computing support, cloud-based AI models and funding for audiovisual technology.
Zhu Zhili, who runs an AI film studio in Shenzhen, said he now receives calls from cities and industrial parks seeking to host his business. He said cities are offering a range of support to bring AI technology and companies to their regions.
Zhu said Shenzhen provides what he calls a strong environment for AI filmmakers, including cheap rent, living allowances and computing support. His personal studio operates from a shared workspace backed by the Shenzhen government and Hong Kong Polytechnic University.
Lower costs fuel a rapid production boom
Filmmakers are turning to AI partly because production costs have fallen sharply. According to China’s state broadcaster CCTV, the cost of producing AI short dramas dropped from about 5,000 yuan ($747) per minute to a few hundred yuan in the first half of 2026. Many productions now use tools like those ranked in a guide to the best AI video generators.
Pan Xiaojun, a postgraduate film-directing student in Hainan, said AI has cut the cost of creating scenes that would otherwise require large conventional film crews and budgets. “A normal wedding scene might cost me 60,000 yuan to shoot conventionally,” Pan said. “But with AI, I can bring the same surreal scene to life for just 1,400 yuan.”
The lower costs are driving a surge in content across the China AI Video Industry. DataEye says 221,900 new AI shows launched on Douyin, China’s version of TikTok, during the first half of 2026, but only 1,055 attracted more than 100 million views.
The figures raise concerns that production may be growing faster than demand. The pattern resembles other Chinese industries that have expanded rapidly with government support while facing weaker domestic demand and pressure on prices.
Copyright questions shadow industry growth
Several cities are expanding their support programs for the China AI Video Industry. Shanghai introduced measures in May to speed AI-powered micro-drama production, while Beijing has a 260 million yuan fund for audiovisual technology. Shenzhen is also offering technical support and subsidized rent to attract AI film talent.
China’s National Film Administration has granted a public-screening license to “Sanxingdui: Future Memories,” a 90-minute science-fiction film described by producer Bona Film Group as the first AI film from a major Chinese studio approved for theatrical release in China. The film is scheduled for release this year.
The rapid growth has also brought criticism. Chinese actors have raised concerns about the use of their likenesses, while audiences have complained about plagiarism and limited originality.
China requires explicit labeling of AI-generated content but has not yet introduced clear copyright rules for the technology. Director Cao Yiwen, whose AI-animated film premiered at the World AI Film Festival in Cannes in April, said European filmmakers are watching China’s approach to regulation, per The Japan Times.
“France and the rest of Europe are still watching and waiting to see whether China will introduce clear laws,” Cao said.
