
What happened
According to Chinese state media, over 95% of the more than 120,000 Chinese microdramas released in the first quarter of 2026 were AI-generated, compared with nearly zero just a year earlier.
Why it matters
This shift shows AI has moved from a novelty to the standard production method for a huge volume of short-form content in a major market, suggesting the technology is now deeply embedded in how entertainment gets made at scale.
What to watch
Whether audiences will accept AI-made content beyond short dramas is still an open question, as their skepticism of feature-length AI films remains; watch if the success of traditional films like Niu Lai signals a limit to AI's advance.
WHO IT HITSThis directly affects actors, studios, and production crews in the short-form video and microdrama industry, who face a sudden collapse in demand for human-made content.
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The shift toward AI-generated content in Asia's entertainment industry is not happening in a vacuum. It follows a year of rapid adoption, particularly in short-form video. The numbers are stark: what was nearly zero a year ago is now the vast majority of a market producing 120,000 microdramas per quarter. This has not gone unnoticed by major players. Kling AI, a video-generating model launched by Kuaishou in 2024, claims 100 million users and says 70% of its revenue comes from overseas. Other entrants include ByteDance's Seedance 2.0 and Alibaba's open-source HappyHorse.
The human cost is already visible. Film studios in Hengdian, a town nicknamed "China's Hollywood," now stand empty. Chris Shaw of Singapore's Lasalle College of the Arts notes there have been "a lot of redundancies in China" and that "a lot of actors and studios have suddenly disappeared." This contrasts sharply with the West, where the 2023 SAG-AFTRA strike highlighted stronger protections for artists. As Ian Dixon of NTU puts it, China doesn't have the legislation to stop AI filmmaking, and there won't be street protests like in America.
The ultimate test is whether audiences will embrace AI for feature films, not just short dramas. The mixed reception of AI shorts and the success of the traditional film Niu Lai—which grossed 60 million yuan ($9.1 million) and beat Spider-Man: Brand New Day—suggests viewers still value human authorship. Whether AI can cross that line will determine if this is a permanent reinvention or a niche disruption.
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