AI is Bollywood's cheapest new hire

Rachel Varghese (0:01)

Mark my words, we are not far away from a one-man-created blockbuster. That's what Vikram Malhotra, the founder and CEO of Abandesha Entertainment, said to my colleague, Shiveka Bakshi. It's the studio behind movies like Breathe Into The Shadows, Jalsa and Shirdi. He is also the former chief operating officer at Viacom 18 Motion Pictures. And he believes that AI will turn entertainment on its head.

Somil Gandhi, the founder of an AI-native film studio called Zandu, takes that belief a step further. He told us that it's now possible for one person to make a two and a half hour film at the scale of Game of Thrones in just 10 days. He even believes that in the very near future, a 70-person film crew can become a team of seven.

All of this is big talk from the Hindi film industry, which has been in financial distress since COVID. Based on the industry estimates, nine out of every 10 films flop. The fees for star actors can take a huge chunk out of even a hit movie's economics.

Producers who can't sell finance often turn to an unorganized lending market that charges 18-60 percent interest in a year.

The current apparent theater recovery also masks a problem. You see, cinema footfall has barely grown in 2025, which is why Bollywood is turning to AI for more than just cheaper, quicker films. It also wants back some control over this punishing economics.

That hope is changing how films get made. It is now becoming more and more possible to keep the core creative talent, the director, the writer, the editor and hand over the technical work to AI.

AI can play a role in the whole value chain from a faint idea to the final release. It can generate shots from scratch or even mix with live action for hybrid cinema.

Malhotra though still says that the beauty of cinema lies in its connect with the audience and believes that stories must still be built around core human emotions and lived experiences. Yet, he is intent on AI.

In fact, since last year, his studio has even launched an AI content division called Ion. In February this year, it even partnered with InVideo, an AI video generation platform, to commit 100 crore rupees to an AI-driven film production studio. Of course, Bollywood is not the first industry to have this reckoning. Three years ago, Hollywood's writers and actors went on historic strikes, putting guardrails around AI use in creative work by studios. Since then, the relationship between studios and creative talent has improved. Bollywood, though, has had no such organized pushback, and so it's embracing AI anyway, pushed less by its belief in the technology and more by desperation.

Welcome to Daybreak, a business podcast from The Ken. I'm your host, Rachel Varghese, and every day of the week, my co-host Snigdha Sharma and I will bring you one new story that is worth understanding and worth your time. Today is Monday, the 28th of September.

Vivek Anjaliya is the founder of an AI studio called Amazing Indian Stories. It has built fully AI-generated features, and Anjaliya told Shiveka that the studio's success ratio is at best.

But that risk has gotten harder to manage after the pandemic. Audiences grew used to OTT content and at a fraction of the cost of a movie ticket. Varsha Ramachandran, a creative producer at a leading streaming platform, explained the math to us. She said, and I'm quoting here, I pay 500 rupees for the film ticket, 600 rupees for the popcorn, and 400 rupees for commute. With an investment of almost 1500 rupees for a 2-hour film, you had better prove to me that I needed to be there.

Even the Fiki EY media and entertainment report from this year showed that domestic gross box office collections rose by 14% in 2025, from over 11,000 crore rupees to 13,000 crore. That's an all-time high. But actually, admissions themselves had barely moved. Nearly 870 million, just about 1.4% more than 2024 And industry estimates suggest that fewer than 150 million Indians went to a cinema at all. That's barely one in every nine people. So, with the footfall being so flat, producers have been leaning on more expensive tickets to keep the cash flow steady. And that makes every big budget bet riskier. But Bollywood keeps making the same bet. It assumes that audiences will pay for a theatrical release only if a star is headlining it. So, producers put a lot of the budget behind A-listers. And of course, that doesn't always pay off.

Take for instance, Yash Raj Films Alpha, the first female-led film in its spy universe. It was released on July 3rd, but it struggled to cross 100 crore rupees worldwide on a reported budget of around 100 crore. And Alia Bhatt, who was a lead actor, was reportedly paid 25 crore out of that budget. The founder of Zanadu considers star fees to be the problem. He said that from a commercial point of view, the industry has been in trouble because star fees are very skewed. And the only way for producers to recover that money is for people to come and fill the theatre seats. The creative producer we spoke to also agreed, and pretty much said that executives are at least partly responsible for their own tough situation. You see, filmmakers need room to experiment, without betting the budget on a major name every single time. And if the industry can't refashion audiences' preferences, it has to reduce the risk of its work. That's where AI comes in. More on this in the next segment.