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Globally, Korean content is booming. K-film and television exports doubled between 2019 and 2024, and last year, the nation’s audiovisual sector added $16.4 billion to the economy, supporting 291,100 jobs.

But beneath the surface, South Korea’s film industry is facing enormous funding challenges. Domestic box office sales are 45% less than they were pre-pandemic, in part due to the rise of streaming. As a result, production companies are pulling back on funding: last year, just 20 films were made with a budget over 3 billion won ($2.15 million), compared to 40 to 50 annually pre-pandemic, according to the Korean Film Council.

“Korean production costs have risen significantly in recent years,” says Hyun-jung Baek, head of content innovation at CJ ENM, South Korea’s largest entertainment and content production company. “So even though K-content is expanding globally, the profits coming from it aren’t great.”

Many production companies, including CJ ENM, are turning to artificial intelligence (AI) to help them cut costs and accelerate timelines.

Advocates say it could revive South Korea’s competitiveness, while critics worry it will replace jobs and dilute the unique character of Korean cinema.

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“There is a real spectrum of opinions on it,” says Seoul-based film critic Darcy Paquet. While the technology can make human labor “more effective,” it can also be used to “cut corners, save costs and speed up the process without the quality,” says Paquet.

While South Korea has been embracing AI-generated content for several years — with fully AI-generated shorts like “It’s Me, Moon-hee,” and more recently with CJ ENM’s webtoon series “Cat Biggie” — the technology is now appearing in feature-length films in a major way.

“Run to the West,” billed as South Korea’s “first AI feature film” when it released in October, used extensive AI to render mythical creatures, fantastical backdrops, explosions and special effects sequences.

Compared with traditional computer-generated imagery techniques, AI tools were 10 times faster and cut costs by half, says the film’s AI director, Hansl Kwon, founder and CEO of Seoul-based AI film studio Freewillusion.

The studio recently hired 60 new AI artists, quadrupling its talent pool and creating new career opportunities at the cutting edge of filmmaking, he says.

Just last month, CJ ENM released its own AI-hybrid film, “The House,” a 60-minute horror thriller produced in collaboration with Google Cloud Korea for just 500 million won (around $336,000).

Shot in just four days in a single indoor studio, Google AI tools Imagen, Nano Banana 2 and Veo were used to generate the backgrounds and visual effects.

“Even though generative AI has advanced significantly, most trained AI is based on Western graphics,” says Baek, adding that, to create realistic imagery, CJ ENM has been building an asset library of K-content.

Utilizing AI for backgrounds instead of elaborate sets could help save time and costs by limiting location changes for actors and crew, as well as create more realistic backdrops for period dramas. Baek estimates AI could “reduce the timeline by 50%.”

On May 21, two more AI features were released in South Korean cinemas. Sci-fi cyborg courtroom drama “I’m Popo” and period drama “Man in Hanbok” were entirely AI-generated, with the latter already receiving attention at AI-focused festivals.

This flurry of AI productions comes off the back of huge government investment and a rapid expansion of education and production support programs around AI.

The South Korean government tripled its AI budget in 2026, and last month, 8 billion won ($5.37 million) of emergency funding for the film industry (which had its annual budget increased by 81% this year) was earmarked for productions using advanced technologies, including AI.

State-backed agencies are on board, too: The Korean Film Council hosted an AI film showcase during the Busan International Film Festival in September, while the Korea Creative Content Agency is investing 19.8 billion won ($13.3 million) into AI productions.

In February, CJ ENM launched the “AI Content Alliance,” an initiative that brings together academia and the private sector, including small and mid-sized studios, to scale South Korea’s AI content ecosystem.

South Korea’s attitude sits in stark contrast to Hollywood, where better AI regulations and protections were a major sticking point in the lengthy Writers Guild and Screen Actors Guild strike in 2023. AI has been used in dozens of major Hollywood films in the past five years, although many — like “The Brutalist” — have faced backlash for doing so.

“Hollywood is very cautious right now; they have a strong aversion to replacing human resources,” says film director and visual effects veteran Seong-Ho Jang. But South Korea’s film guilds are less established than those in the US and have limited influence and strike rights, so “individual voices tend to be drowned out,” says Jang.

His company, MOFAC Studios, produced the animated hit “The King of Kings,” the highest-grossing Korean film in the US to date, for a fraction of the cost of a Hollywood production.

For a small studio like his, Jang says AI is not just about cutting costs, but improving quality: he’s currently integrating AI into MOFAC’s production workflows, with the company receiving a 6-billion-won ($4 million) investment last year to further develop its Unreal Engine-based production technology.

“In the past, a team leader would have 20 or 30 people working in each department. Now, with just one or two, or at most three or four, team leaders can achieve the same level of efficiency, faster, and with higher quality. That’s a tremendous advantage,” he says.

While the South Korean government might be all-in on AI, not everyone is on board.

Park Chan-wook, one of the country’s most acclaimed directors, has been vocal in his concerns about the encroachment of AI on the industry, worrying that it will replace a huge number of jobs and filmmakers will be forced to embrace it.

In the climax of his recent film “No Other Choice,” starring Lee Byung-Hun, Park touches on the replacement of human labor with AI.

“I wanted to convey the message that getting fired is a very violent act that destroys one’s humanity — and AI is doing that to mankind right now,” Park told The Hollywood Reporter in October.

Similarly, “Parasite” director Bong Joon Ho has been outspoken about his fears of AI’s use in the film industry, although he acknowledged that AI was used in some of the visual effects in his 2025 film “Mickey 17.”

Copyright frameworks are still evolving: while the Korea Copyright Commission has issued multiple generative AI guidelines — addressing what works qualify for copyright, preventing copyright disputes, and how fair use applies to training AI models — there are still many unanswered questions around authorship and ownership for generative AI works.

“The concept of credit may now shift from individual artists to companies,” speculates Baek. “Of course, the artist takes credit for that work that he or she did; but ultimately, the company that built the system of the database is also important.”

AI in cinema raises ethical challenges around bias, stereotyping, and cultural homogenization, and some critics argue that algorithm-driven aesthetics may erode the human touch that made K-cinema iconic.

“I think there’s a real risk that, on the one hand, you’re able to create these images that are really difficult to create in the real world; but you lose something at the same time,” says Paquet. “AI is going to give new options to filmmakers, but I’m not sure it’s going to make things easier, because if a production does sacrifice quality, I think the audience may not support that.”

The use of AI isn’t necessarily a draw for viewers, either. AI feature “Run to the West” performed poorly at the box office, despite half-price tickets. Even with its low budget, admissions were around one-seventh of the number needed to break even.

“The industry is still sort of feeling out what’s possible, what’s reasonable, and what might be the best choice,” says Paquet, adding: “The industry is open minded, but my feeling is, it hasn’t really strongly committed to AI yet.”

For many, though, AI is just another technology: many have compared it to other sector-wide technology changes — such as the introduction of sound to silent films in the 1920s, videotape in the 1980s, or the advent of streaming — which the industry has largely weathered.

“Content has always evolved alongside technology,” says Baek, adding that in addition to improving productivity and efficiency, creativity will be enhanced “by enabling things that weren’t possible before.”

There are areas that can’t be replaced by AI, she adds: for example, story development, scripting and acting.

“The characters driving a live-action story are actual actors, and AI cannot replicate the actor’s eye expression or the facial nuances,” she says.

Kwon sees the integration of AI into films as an extension of CGI technology: he recalls fears that films using computer graphics wouldn’t resonate, but films like “Avatar” demonstrated the technology could deliver emotional impact.

“It is not important what tool makes a film, but the real importance of filmmaking is the core message,” he says.

For Jang, AI should be “understood as a useful tool,” and used sparingly.

“The moment you start thinking AI can do everything and overusing it, it’s not a good approach. Audiences will quickly notice that,” says Jang, adding: “My goal is to use AI effectively, but also to get audiences to ask, ‘Where did you use AI?’”