electra-supply.comIn recent months, startups in the AI visual sector have been on the lookout for commercial opportunities as they transition from large models to commercial projects. At the AI Visual Creativity Competition hosted by the Longgang District People’s Government of Shenzhen, along with Shanghai Film and Bilibili, Wen Xiaomeng, COO of Wankou (Chengdu) Intelligent Technology Co., shared insights with First Financial reporters. His company is currently developing an AI portrait project. After deciding to enter the field at the end of last year and observing the landscape for six months, they recognized in the latter half of the year that AI technology had reached a level of commercial viability.
Another company making strides in the commercialization of AI is Shanghai Fengzhuan Culture Communication Co., an animation pre-production firm. Co-founder Yu Linfeng revealed that the company has been exploring AI for the past year and a half, and in the last two to three months, they discovered that AI could be integrated into their animation processes. This led them to develop a new workflow that significantly boosted their efficiency.
The rapid maturity of AI technology is essential for its commercialization. One creator explained to reporters that AI technology has evolved from the “obvious fakeness” seen in portrait generation one or two years ago to now being “indistinguishable from reality.” The AI Visual Creativity Competition also included a creative market and a workshop, where conversations with various exhibitors, creators, and industry experts reflected a shift in focus from “What can AI do?” to “How can we leverage AI for profit?”
Started Early with AI
Earlier this year, some AI-generated videos began appearing on various platforms. At that time, high-quality AI videos were still relatively rare, and creators were cautiously evaluating commercial potentials. However, with the rapid iteration of AI technology in the second half of the year, a number of eager startups decided to jump in, leading to the emergence of different business models.
For Wen Xiaomeng, this technological evolution signifies the arrival of AI’s “commercialization capability.” He has been following AI developments closely and noted that from 2021 to the end of 2022, AI-generated characters often looked “obviously fake,” with disjointed facial features and uncoordinated limbs. Gradually, AI-generated portraits began to resemble real human images, nearing 99% fidelity to camera-captured photos. Since June, his company has invested in operations, generating 7,000 orders for AI portrait projects, although the initial investment has yet to break even.
Wen explained that the business model revolves around using AI models to develop portrait products in various themes. Users can place orders online, uploading their portrait data, or visit offline collection points. Then, AI-powered facial deep synthesis technology creates a personalized photo collection for them. Karina sees a significant business opportunity in the high cost of traditional portrait services, which often exceed thousands of dollars. In contrast, AI-generated portraits require minimal costs for personnel and post-production, with the AI processing around 50 customer photos taking just about 18 minutes for a cost of less than $2. Thus, they can offer a set of AI portraits priced under 300 yuan.
Similarly, Yu Linfeng observed the growing maturity of AI technology, prompting his company to recruit technical staff to integrate AI into their animation process. He noted that many industry teams are waiting for stable products, but his company couldn’t afford to wait. By breaking down traditional animation workflows and incorporating AI, he found that they could reduce their dependency on outsourced labor. “AI can definitely bridge a significant cost gap compared to outsourcing,” he explained.
The efficiency gains have also reduced the manpower required for each product. “Previously, one second of animation required 12 frames to be drawn. Now, we just draw the first and last frames, leaving the middle 10 frames to AI,” Yu noted. Where a one-minute 2D film used to need a six-person team working for a month, they can now produce a five-minute film with just a ten-person team in a little over a month.
Creators Seeking New Opportunities
Creative professionals are eagerly seeking ways to capitalize on AI as well. The AI Visual Creativity Competition received 3,396 submissions of images and videos. Qing Shan, a member of the award-winning video team at Yue Mo Studio, shared that they participated to evaluate their work’s quality and to connect with industry resources. “The iterative advancement in AI technology has significantly impacted our creations. Last year, AI videos lacked clarity and continuity, resembling a PowerPoint presentation. Now, videos have logical transitions and much improved quality,” another Yue Mo member, Mo Chan Du, added. While they have not yet identified a clear monetization strategy for AI videos, they believe that the quality and cost advantages of AI will eventually lead to viable business models. Historical methods often required huge investments to achieve the quality that AI can now deliver without hiring actors or purchasing cameras.
The Shift Toward AI
Beyond startups proactively using AI for profit, the technology is disrupting traditional creative fields, making it difficult for professionals to avoid its impact. One evident consequence is the replacement of some labor and the subsequent reshaping of industry pricing and job roles. Yu noted that mid-level teams often employ a considerable workforce—about 80 staff for a medium-sized team and over 200 for a large one. The reluctance of traditional animation teams to adopt AI stems from fears of reducing workforce needs and the complex process of corporate adjustments, especially before technology has fully matured.
As AI becomes integrated into workflows, creators will need to adapt to evolving demands. “The most immediate change is time requirements. Projects that once needed a month can now be completed in a week or even just three days, particularly in design,” remarked Luo Xiao, founder of a programming lab engaged in interactive media, AI, and generative arts. Even those who do not use AI find clients evaluating their work based on the speed implied by AI usage, setting a trend towards cost pressures on business projects.
Luo expressed concern about creative professionals facing heightened expectations despite the efficiencies gained from AI. “Ideas that might take a week to properly conceptualize are now required to be finalized within a day or half a day, leaving the rest to AI for rapid production. While AI increases overall efficiency, it also intensifies the cognitive demands on creators,” he explained, noting that while creative work may become more mentally taxing, returns could be influenced by commercial demand.
“The question of how AI will monetize remains ambiguous. While the overall skill level rises with AI, product prices may not proportionately increase. In a competitive landscape where everyone is adopting new technologies, sticking to conventional methods might inhibit progress,” commented Zhao Bozuo, Executive Chairman of the British International Film Festival Group and a mentor in the Master’s program at Shantou University’s Changjiang Academy of Art and Design. Overall, the impact on creators appears to favor the strong as less experienced artists may find themselves producing homogenized work through over-reliance on AI.
Concerns have also emerged regarding AI’s influence on education, as Zhao highlighted that while he encourages students to engage with AI and stay in step with technological advancements, he worries about the potential for students to simply use AI as a tool for generating artwork, rather than developing their skills.
Navigating the Challenges
As new technologies disrupt traditional industries, practitioners are in the process of reassessing their roles and adapting their mindsets. Zhao emphasized the shift needed in art and design education, advocating for a focus on fundamental aesthetics and theoretical knowledge, areas that may have been overlooked by beginners but which are now more crucial than ever.
With AI making creation more accessible, many creators echo the sentiment that aesthetics and creativity have become even more vital. Qing Shan remarked, “With increased efficiency and lower technical requirements, anyone can produce art, but it risks becoming homogenized. To stand out, the core of producing exceptional work will still hinge on creativity and aesthetic sense.”
Wen Xiaomeng believes that no single company currently holds a decisive edge among the leading AI visual generation firms. He predicts that within a year, advancements in image generation technology may plateau, leading to a level playing field where competitive edges shift from model quality to aesthetics and creativity. “When everyone has access to powerful tools that can craft life-like images from simple prompts, the competition will no longer be about superior models but rather about who brings creativity and aesthetic sensibility to the table. In the end, AI tools are just one element of a business strategy, and the future focus will return to the essence of the industry,” Wen concluded.
In the long run, industry insiders remain optimistic about AI infusing new vitality into the visual creativity sector. Zhao shared his experience utilizing AI for product design, comic book creation, and artwork, which has broadened his creative horizons. Yu Linfeng cited the animation industry’s prolonged production times as a significant issue—a 26-episode series can take two years and cost millions to produce. With AI, it’s possible to cut down both time and costs, with a previously $30 million animated film potentially produced for only $2–3 million. This technological shift could allow for more animated content to reach audiences.
