The numbers come first. Chinese state media says more than 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.
That shift is no longer limited to short-form content. Hong Kong broadcaster TVB released a 10-episode short drama titled 'You, and Only You' last September, and the network is now using its virtual actors in ad campaigns. In Singapore, two AI-generated films marked the country’s 61st birthday: 'Bersama Majulah' and 'Trace Project'. Neither featured a human actor.
The cost advantage is the real story. One short film from Edenstone cost 8,000 Singapore dollars, or $6,315, to produce. In China, some large companies in Hangzhou are using AI to generate 100-minute dramas for under 20,000 yuan, or $2,981, according to Chinese media outlet Caixin Global. Studios in China are turning to models from ByteDance and Kling to make those economics possible.
The roster of players is growing fast. Fortune reports that Kling AI, launched by Kuaishou in 2024, claims 100 million users and says 70% of its revenue comes from overseas markets. Other names in the market include ByteDance, Alibaba and U.S.-based startup Higgsfield AI.
Executives and creators say the technology is opening doors. Danming Xie of iQiyi said AI is 'like oxygen' and that it is 'increasingly impossible not to use AI in video production.' Gong Yu, the founder of iQiyi, called AI a 'once-in-a-decade opportunity.' Pax Chen of FizzDragon said AI helps circumvent Hollywood’s diversity problem, while Joel Boh of Edenstone said the tools make filmmaking more accessible.
But the economic pressure is also clear. Hengdian, the town nicknamed 'China’s Hollywood,' now has empty studios as the industry turns to AI to generate short - and increasingly not-so-short - dramas. Chris Shaw of Singapore’s Lasalle College of the Arts said there have been 'a lot of redundancies in China,' adding that 'a lot of actors and studios have suddenly disappeared.'
There is also a regulatory edge. Ian Dixon of Nanyang Technological University said China does not have the legislation to stop people from making films using AI, while the West has more frameworks in place to protect artists. He pointed to the 2023 SAG-AFTRA strike as evidence that American labor is pushing back.
For capital, this is the sort of disruption that rewrites margins fast. When the taxpayer is not in the middle and regulation is looser, production gets cheaper, faster and harder to stop. That can expand output, but it also puts the human workforce on the defensive.
The market has already voted. In Asia, AI is not waiting for permission from bureaucracy or from legacy studios. It is being used to cut costs, scale content and move faster than the old entertainment model can adapt.
