China witnessed the release of 430,000 micro-dramas in the first eight months of the year, with over ninety per cent generated by artificial intelligence. As local governments subsidize AI studios to cut production costs below conventional filmmaking, regulators are moving to support live-action talent and curb copyright infringements.
Subsidies and Shared Workspaces Fuel the AI Studio Rush
When Zhu Zhili searched for a base to establish an artificial intelligence film studio two years ago, the technological ecosystem of Shenzhen stood out as the primary choice. Now, local governments and industrial parks across China are actively courting AI filmmakers with aggressive recruitment pitches. Zhu, who heads the AI-Generated Content department at China Wit Media in Shenzhen, runs his personal studio from a shared workspace backed by the city government and Hong Kong Polytechnic University. Across the nation, municipalities are deploying familiar industrial policy playbooks previously used for electric vehicles, solar panels, and robotics to dominate the emerging AI media sector.
Producers point to stark financial savings as the main driver behind the rapid industry pivot. In the first half of 2026, the cost of producing AI short dramas dropped from 5,000 yuan ($747) per minute down to a few hundred yuan, according to state broadcaster CCTV. Pan Xiaojun, a postgraduate film-directing student in Hainan, noted that a conventional wedding scene might cost 60,000 yuan to shoot traditionally, whereas artificial intelligence brings a surreal scene to life for 1,400 yuan. Local incentives, including computing support, rent waivers, and cloud-based models introduced by Shanghai in May, have further lowered economic barriers for creators targeting domestic and overseas distribution.
Massive Output Volumes and Douyin Viewership Benches
The sheer scale of the automated production wave has transformed online viewing habits. Wang Xiaoliang, director of the National Radio and Television Administration Department of Online Audio-Visual Programme Management, announced that 430,000 micro-dramas were released in China during the first eight months of the year, representing roughly 13 times the total volume from the previous year. More than 90 per cent of those productions were generated by artificial intelligence.
Despite the proliferation of titles, market saturation has created fierce competition for viewer attention. DataEye figures show that out of 221,900 new AI shows launched on Douyin in the first half of the year, only 1,055 crossed the 100-million-views threshold typically considered a benchmark of success. Major platforms are committing deeply to the shift; iQIYI chief executive Gong Yu stated in August that his company is entirely committed to artificial intelligence and is offering creator subsidies for platform-streamed content.
Regulatory Crackdowns and Live-Action Financial Pushback
The rapid expansion has simultaneously squeezed traditional industry professionals. Real-life actors have experienced plummeting wages and scarce job opportunities, with some licensing their likenesses to production companies for as little as 100 yuan (S$19). In response to the market flood, the National Radio and Television Administration announced plans to inject financial backing into live-action productions. Our position is very clear: Live-action dramas are the main force behind quality productions and should receive strong support, Xiaoliang stated at a press conference, adding that platforms will be guided to establish dedicated sections for live-action works.
Simultaneously, authorities have tightened regulatory oversight. Under new rules that took effect on September 1, artificial intelligence micro-dramas must display prominent notices in every episode and carry explicit identification labels. Regulators have also cracked down on problematic material, removing 68,000 micro-dramas this year for violations involving copyright infringement, piracy, and harmful or vulgar content. Platforms were instructed to take action against more than 1,200 offending accounts, with over 90 per cent of the targeted content involving artificial generation.
Consumer and creator backlashes have accompanied the technological boom. Audiences have increasingly complained of plagiarism and a lack of originality, while voice actors face job insecurity.
“Some people directly blend other people’s original characters or dance clips into AI-generated content without any credit.
Photo: Reuters
Wen, 22-year-old AI content fan
Amid these disputes, the National Film Administration granted a public-screening licence to Sanxingdui: Future Memories, a 90-minute science-fiction epic produced by Bona Film Group. Marking the first domestically produced artificial intelligence feature to secure regulatory approval for a theatrical release, the studio scheduled the film’s premiere for later in the year.
Sophie is a tech innovator and acclaimed tech writer recognized by the Online News Association. She translates the fast-paced world of technology, AI, and digital trends into compelling stories for readers of all backgrounds.
