AI in Hollywood: The Copyright Minefield That Studios Can’t Afford to Ignore

by TWR. Editorial Team | February 22, 2025

AP Photo/Ashley Landis, File

Hollywood’s inevitable reliance on Artificial Intelligence is no longer a peripheral concern for the beleaguered industry — it is at its very core. The rapid adoption of AI-driven storytelling, script analysis, and content generation is raising fundamental questions about creativity, ownership, and legality. While studios and producers rush to incorporate AI into their development pipelines, a critical miscalculation is being made: failing to understand where their AI partners source their intelligence.

The lawsuits are already piling up. Writers, authors, and journalists have begun taking AI companies to court over the unauthorized use of their work. The Intercept has accused OpenAI of using its articles to train ChatGPT without consent, while authors like Christopher Farnsworth are suing Meta for allegedly feeding their books into AI training models. Hollywood, a multi-billion-dollar industry built on intellectual property (IP), is walking into the same legal trap — often without even realizing it.

But the biggest mistake studios and executives are making? Partnering with AI companies that don’t have safeguards in place to prevent IP infringement. Why would they? Often developed by engineers with zero experience within the Arts, many of these AI tools are not built for Hollywood’s needs — they are designed for efficiency, trained on existing content without permission, and optimized for mass deployment. What studios need is a trusted producing partner with a focus on ethical and innovative creating — one that understands both AI and storytelling and ensures compliance with intellectual property laws.

Because in an industry where a single lawsuit can halt a production, using the wrong AI can be just as dangerous as hiring an unvetted screenwriter who plagiarizes entire scripts. Do you really want your studio named in a class-action lawsuit because you blindly partnered with a tech company drenched in derivative output, with zero regard for a 130 year old industry steeped in tradition? Simply put, moving fast and breaking stuff doesn’t sit well with the old guard at the WGA. And we understand why.

The Real Danger: Studios Are Flying Blind on AI Compliance

The biggest misconception in Hollywood right now is that AI-generated content automatically belongs to the studio that commissioned it. But copyright law does not work that way.

1. If an AI model is trained on infringing content, the outputs can still be considered derivative works.

2. Studios using AI-generated scripts without verifying their originality could be sued for unintentional copyright infringement.

3. Even if an AI company promises compliance, if they cannot prove their training data is clean, studios are still at risk.

It is not enough for studios to assume that their AI vendors are operating legally. They must demand transparency, accountability, and clear safeguards. If an AI provider cannot clearly explain where its data comes from — or if it relies on scraped content — it is a liability waiting to explode.

The Growing Legal Storm: What Hollywood Needs to Learn from Recent Lawsuits

If Hollywood executives believe they are insulated from the AI lawsuits currently rocking the tech world, they are mistaken. The legal challenges facing AI in media today serve as an urgent warning: using AI models trained on copyrighted material without proper licensing is a lawsuit waiting to happen. Blatant plagiarism aside, do audiences really need another derivitive of a derivitive of a derivitive?

The Intercept’s case against OpenAI is a prime example. In February 2025, the publication sued OpenAI, claiming its content had been used to train ChatGPT without consent. U.S. District Judge Jed Rakoff ruled that the case could proceed, stating that the removal of copyright management information constituted potential harm. This lawsuit follows a wave of similar litigation against OpenAI, The New York Times, and other major AI players over the unauthorized use of copyrighted data.

But the problem isn’t just limited to Tinseltown. The publishing industry is fighting back as well. In October 2024, Christopher Farnsworth, a novelist and screenwriter, led a class-action lawsuit against Meta, alleging that the company used pirated books to train its AI model, LLaMA, without permission. According to the lawsuit, Meta scraped thousands of books to enhance the model’s ability to generate text, creating an AI that could mimic the voice and structure of copyrighted works.

Hollywood needs to take note. AI models trained on copyrighted scripts, screenplays, or even transcripts of movies could easily fall into the same legal gray area, putting studios at risk of lawsuits from screenwriters and rights holders.

Hasty AI Partnerships and the Risk of Copyright Liability

Sylvester Stallone recently made headlines for backing an AI company focused on script development. While AI-assisted storytelling has clear advantages, the risk lies in how these AI models are trained.

Many AI-driven content platforms do not build narratives from scratch, nor have they built a proprietary framework for classic filmmaking — one that fills movie theaters with audiences flocking to take in original concepts. Instead, they analyze thousands of existing scripts — often without explicit licensing — to map storytelling frameworks. This creates a legal gray area: if an AI model is trained on copyrighted material, its outputs may be considered derivative works, making any studio that uses them vulnerable to copyright lawsuits.

This is where Hollywood must be extremely cautious. Tech firms focused on AI innovation often prioritize speed and automation over compliance with industry standards, union agreements, and intellectual property law. Companies that train models on unlicensed screenplays or film transcripts may be setting studios up for future legal battles — battles that could result in massive settlements and even halted productions.

The lesson for Hollywood? AI should be developed and deployed by creative professionals who understand the industry — not just engineers focused on maximizing efficiency.

Why AI Needs a Producing Partner — Not Just a Tech Vendor

Many executives view AI as a simple tech procurement decision. They assume that integrating an AI writing tool or story generator is no different from adopting a new piece of editing software. But this mindset is dangerously flawed.

AI is not just another piece of software — it is a collaborator, a tool that generates creative material. If improperly sourced or trained, AI-generated content can infringe on existing works, exposing studios to litigation, reputational damage, and distribution challenges. A poorly vetted AI tool could create a script that unknowingly mirrors copyrighted material, triggering costly legal battles that could shut down an entire production.

This is why studios need a trusted producing partner, not just a tech firm. Companies like inArtists (iA) and its development team, specialize in IP localization, ensuring that AI models are trained in ways that do not rely on copyrighted material. Through proprietary storytelling frameworks, iA and its content division Cinapse develop original narratives, not recycled ones.

Unlike AI companies that rely on scraping data from the web, iA focuses on training models using structured, legally cleared datasets — allowing studios to confidently use AI without fear of legal repercussions.

The Future of AI in Hollywood: Risk or Revolution?

AI is not going away. In fact, it will become an integral part of Hollywood’s future. But the way studios engage with AI today will determine whether it becomes a legal minefield or a revolutionary tool for content creation.

Hollywood must adopt a strategic, responsible approach to AI. That means:

• Partnering with AI companies that localize IP and ensure compliance.

• Seeking product developers with storytelling expertise, producorial backgrounds.

• Demanding transparency in AI model training data.

• Avoiding vendors that scrape copyrighted material to build their systems.

• Investing in AI-driven storytelling frameworks that generate original, legally sound content.

  
  

The studios that succeed in this new era will be the ones that treat AI with the same level of legal and creative scrutiny as they do human writers, directors, and producers. The ones that don’t? They will be the cautionary tales of the next decade.

For Hollywood executives wondering where to start, the first step is choosing an AI partner who understands both the technology and the creative process. That’s what will separate the winners from those entangled in endless litigation.

Because the next blockbuster AI-driven film should play out on-screen — not in a courtroom.

---

Insightful perspectives and deep dives into the technologies, ideas, and strategies shaping our world. This piece reflects the collective expertise and editorial voice of The Weekend Read.