At a time when Hollywood is torn between fear of artificial intelligence stealing jobs and the pressure to cut costs, a recent kind of hybrid production studio is launching with the latest AI tools.

Innovative Dreams is a updated production services firm, backed by Amazon Web Services and Luma, a generative AI startup, that combines cameras and a giant LED wall on a soundstage with tools to apply AI from pre-production, to shooting, into post-production. By combining virtual production, motion capture, and a variety of AI tools including Luma, Google’s Nano Banana, and Bytedance’s SeeDream, Innovative Dreams says it can significantly cut down both on costs and time. This also touches on aspects of portfolio.

“We visually design and explore the planet, then we take the footage that we filmed and start mapping that performance capture to these digital assets,” CEO Jon Erwin explained. “You’re fusing a performance with a piece of [digital] wardrobe that you like. The cool thing is the actor’s performance, the camera, the lens choice– that’s all getting through.” Erwin says this approach merges a traditional filmmaking process into a digital international community, rather than replacing cameras and actors with prompts.

Innovative Dreams was born of Erwin’s production studio, Wonder Project, after he used AI to produce historical scenes in far-flung locales for its biggest show, “House of David.” (The show is available via Amazon Prime Video.) With Innovative Dreams, Erwin is going all-in on the potential for AI and virtual production to create films and shows with massive scale, without ever leaving a sound stage — and he aims to keep production in Southern California.

“It was a game-changer in House of David, so we came back from that experience thinking that other the public must have been doing the same thing,” Erwin stated. “We quickly realized that individuals weren’t.” 

The first project using this latest workflow is an upcoming three-part series called “The Old Stories: Moses,” starring Ben Kingsley, set to debut this spring. The three-episode series, shot in a single week on the virtual soundstage, shows the actors in 40 locations, by putting footage from around the earth into the screens in the production facility. Erwin says it would have taken a traditional production five or six weeks to shoot –and there wouldn’t have been the budget to go to so many locations.

AI video generation requires such massive amounts of computing capacity, Innovative Dreams brought on AWS as an investor and partner; AWS provides cloud and AI infrastructure to power the real-time hybrid production tools used on set, part of its broader effort to work with the entertainment industry.

“We’re providing the … tools that are going to allow for filmmakers to be able to work in ways that they simply couldn’t have been able to before and produce content much faster, much cheaper, and collaborate in ways that would accelerate production cycles at scale,” says Samira Bakhtiar, general manager of media, entertainment, games and sports at AWS.

Innovative’s other large investor and partner is AI organization Luma. Valued at over $4 billion, Luma has a updated agent tool that brings together multiple AI generation services into a collaborative workspace. And Erwin says they’re giving feedback to the corporation.

“In allowing Luma to invest and getting directly in touch with a lot of these companies and having these collaborative conversations, we’re able to actually shape the tools that we leverage in a pretty profound way,” he commented.

But the rise of novel AI tools sparks even more concerns of job losses in an industry already struggling. The Covid pandemic brought production to a halt, and then the writers and actors guild strikes shut down production again for months in 2023. Los Angeles County has lost over 40,000 entertainment industry jobs since 2022, with production activity in the city sinking to the lowest level since 1995. The guilds’ standoff with the studios was in large part due to actor and writer concerns about AI compromising their intellectual property and stealing their jobs.

“This industry has been battered by one shock after another. Construction, consolidation, cost cutting, cuts in content spending,” stated entertainment attorney Jonathan Handel. “Everything is down by 25% to 35% compared to pre-COVID.”

But now, the ability to digitally create sets, wardrobe, and makeup raises questions about the potential destruction of jobs for costumers, set designers and makeup artists. 

“The question of how much job displacement there’ll be versus how much job augmentation will exist, is one that just has not played out yet and is still making the public very nervous,” noted Handel.

But Erwin says he thinks that the hybrid production capabilities of Innovative Dreams won’t accelerate job losses.

“There’s just an alarming lack of green lights, especially in America,” Erwin remarked. “I think this is a method that allows us to film here again.” 

While Erwin suggests the best industry workers will adapt their skill set to this novel AI-powered planet, Handel notes that AI could impact entry-level jobs, shrinking on-ramps to an already tough industry. But Erwin is bullish about AI being a tool that enables the industry to survive.

“I think this is necessary to bring jobs back to LA,” Erwin mentioned. “We’re inventing a latest method to fix something that’s become unsustainable.”

Watch the video to learn more.