Is budget push to develop animation, VFX, gaming talent in AI era pragmatic?

In the organized sector, including feature films and OTT series, the impact will be incremental but irreversible as AI will increasingly be embedded into pipelines to reduce turnaround time, manage costs, and optimize post-production, particularly in VFX-heavy projects, according to experts. However, AI poses a greater risk to short-form and social media content.

Studios would also have to focus on ethical and legal awareness, including copyright issues, the responsible use of AI-generated content, consent and likeness considerations, especially when working with digital characters or facial data.

“The impact of AI will be uneven across formats. Long-form films and OTT content will see controlled adoption due to quality benchmarks, brand risk, and accountability requirements, which necessitate human oversight. AI will assist workflows but not drive creative outcomes,” said Mihir Rale, partner– (co-head – digital | TMT), Cyril Amarchand Mangaldas.

In contrast, according to Rahul Hingmire, managing partner, Vis Legis Law Practice, short-form and social media content is far more exposed to AI-led automation, as speed, cost efficiency and volume take priority over creative perfection. “As a result, disruption will be faster and deeper in digital-first, unorganized content ecosystems.”

AI to end repetitive tasks

Animation and VFX work itself may be considered one of the first steps towards automation. AI is the natural next step in this journey, and the capability, efficiency and output are hard to ignore, said Rale.

Finance minister Nirmala Sitharaman in the budget for 2026-27 proposed a ₹250-crore allocation to expand formal talent development across schools and colleges for AVGC.

AI currently contributes to VFX in a big way, according to Danish Devgn, founder and CEO, Lens Vault Studios, a media company focused on technology-driven entertainment production. “It is mainly used for pre-visualization, background generation, imaging a world and our characters. AI is not replacing core creative talent such as directors, lead animators, or VFX supervisors. However, it is reducing the need for entry-level and repetitive roles and also helps me cut down on my “man days.”

In long-form films and shows, AI will mostly act as an invisible accelerator, not a creative replacement, according to experts.

VFX planning, localization, dubbing, de-aging, and even audience testing will become faster and cheaper, but the core creative authority will still sit with humans, said Prashant Puri, co-founder and CEO, AdLift, a digital marketing agency acquired by Liqvd Asia.

Optimizing budgets

Big studios will use AI to reduce risk, optimize budgets, and scale production globally, not to fully automate storytelling, according to Puri. The stakes are too high and the audience expectations too nuanced for fully AI-generated long-form content to dominate, he said.

Archisman Misra, founder and CEO of StudioBackdrops.com, an online platform for photography, video, and audio equipment, pointed out that the majority of the AI-generated content that is available online today is lacking in effort, quality, or meaning. That is why it has been deservedly termed ‘AI Slop’. AI may be used in building code and animation tools, but hasn’t been widely accepted as a replacement for human talent.

Still, AI is reshaping how animation and VFX work is produced, but it is not replacing the creative foundation of the industry, agreed

Rajiv Chilaka, founder & CEO of Green Gold Animation, sees AI taking over repetitive and technical tasks, reducing turnaround times and changing how teams are structured, particularly at the entry level. At the same time, he does not see AI replacing human creativity, visual judgment and storytelling, which remain central to quality and impact.

The industry’s focus is on helping talent move up the value chain, using AI as a support tool while strengthening the skills that machines cannot replace.

“In large studios and on long-form projects like films and premium shows, AI has not replaced core creative roles, directors, animators, character designers, and VFX supervisors remain essential to the creative process,” said Sourabh Kumar, founder and CEO at PunTooon Kids, a kids’ channel on YouTube and VidUnit, an influencer marketing platform.

“In short-form and social media content, especially in the unorganized sector, we do see solo creators or very small teams using AI tools to achieve outputs that earlier required larger teams,” he said. “This has changed how talent is hired, not eliminated creativity-driven roles.”

Copyright, responsible AI

From a legal and policy perspective, the real relevance of AI in animation, VFX, and gaming lies not in measuring immediate job displacement, but in how talent is trained to work alongside AI responsibly.

The rapid integration of AI into these segments is already raising complex copyright and contractual questions, said Anushree Rauta, equity partner (head of media, entertainment and gaming practice), ANM Global.

“In this context, talent development, backed by the ₹250 crore budget 2026 allocation, cannot be limited to technical upskilling alone,” said Rauta. “Creators and studios must be trained in IP provenance, licensing awareness, and safeguards against the unauthorized use of copyrighted works.”

When using AI tools to create content, it is important to understand the nuances around originality and ownership of AI-generated works.

Under the current Indian copyright law, effective copyright protection requires human authorship and originality of works. Care must also be taken to avoid infringement of third-party rights, particularly where AI tools are trained on datasets and generate outputs substantially similar to existing works,” said Tanisha Khanna, partner, Trace Law Partners. “Due to these grey areas, talent should be trained to view AI as an assistive technology with human authors retaining ownership and control over the final output.”

Saswati Soumya Sahu, partner, ANB Legal, calls for deliberate investment in non-automatable capabilities: storytelling, visual authorship, ethical decision-making, aesthetic originality, and cross-disciplinary thinking.

“These are the skills that anchor creative ownership and legal responsibility, particularly important as questions of copyright, authorship, and liability around AI-generated content remain unsettled,” said Sahu. “Talent development must therefore integrate legal literacy around IP, data rights, and responsible AI use.”