AI helped Merry the Christmas Witch director Tom Walsh turn a movie he priced at $80 million into a finished two-hour film that cost only $1.5 million. Holiday movies have always promised movie magic, but this one found its sleigh ride in a pile of AI tools. Hollywood has already watched AI wander into docudramas and summer blockbusters, so a witch with a Christmas birthday was apparently next in line.

While studios hesitated over an unknown witch, one director kept doing the math until artificial intelligence finally entered the equation.

AI became the workaround that let Tom Walsh bring Merry the Christmas Witch to life when studios hesitated to fund it. As CEO of independent company TW3 Entertainment, he loved the idea of a Christmas witch, yet studios would balk at the cost.

“We were kind of stuck," Walsh told Variety.

He then added, “The doors are not very open to new kind[s] of ideas...” and said closed doors squeeze independent filmmakers, which is where AI came in.

According to Variety, about 50 people worked on the film during a 10-month production, from foley artists to a composer. Human actors recorded the script, but syncing problems led Walsh to choose AI-generated voices. Walsh and AI studio Phatty Acid used tools such as ElevenLabs, Seedance, and Nanobanana to build the film. Walsh describes it as a hybrid production, adding that the experienced crew determined whether the AI-generated work looked polished or sloppy.

Ben Affleck Claims His $587M AI Deal With Netflix Means a Lot More Than Just Money

While one director uses AI to cut production costs, Netflix points the same technology at whoever is holding the remote.

Netflix is testing a conversational interface that lets viewers talk about what they want to watch instead of relying on titles or genre labels. Someone can ask for a light mystery or an easy watch after a long day, then refine the results with follow-up prompts. Ritwik Kumar, the company’s vice president of AI strategy and innovation, told Fortune that early pilots showed users had plenty to say once invited.

Netflix is also testing AI-enabled advertising that matches an ad’s tone to the program, including ads referencing a paused Stranger Things. The company is pushing behind the camera too, buying Ben Affleck’s AI filmmaking company InterPositive in March. Its 16-person team joined, and Affleck became a senior adviser. Creative partners used generative AI across roughly 300 titles in 2026, mostly in post-production. Meanwhile, Merry the Christmas Witch turned an $80 million estimate into a $1.5 million film, which is the kind of discount Santa himself would envy.

Martin Scorsese Backs AI Startup: Legend Plans to Use Tech to "Evolve" Cinema

What are your thoughts on AI making movies and picking them for you? Let us know in the comments.