Gen-AI set to take centre stage in India’s entertainment economy

Mumbai-based film studio Abundantia Entertainment on Thursday announced a ₹100 crore, three-year commitment to produce five AI-driven films in partnership with the US-based InVideo, a deal that the companies are calling the largest structured commitment to AI-driven filmmaking in India to date.

Tiger Global backed InVideo is known for its AI-led professional video production platform. Under the arrangement, the technology partner will provide AI and virtual production infrastructure, while Abundantia will anchor creative development and physical execution.

The deal was revealed at the India AI Film Festival, held at New Delhi’s Qutub Minar on the sidelines of the India AI Impact Summit 2026. The festival is hosted by InVideo and sponsored by Nvidia.

Separately, InVideo also announced the acquisition of Mumbai-based creative AI studio GoBo Labs, known for AI-first campaigns for brands including Hindustan Times, Vaseline and Mahindra.

The move signals consolidation within the emerging AI-content ecosystem, as global platforms look to integrate local creative capabilities and filmmaking workflows.

Built on OpenAI GPT‑4.1, gpt-image-1, and text-to-speech models, invideo AI lets users direct their vision while AI agents handle the rest. Whether it’s a TikTok ad, product demo, or explainer video, users can generate and edit a complete video using natural language prompts in minutes instead of hours or days. 

“OpenAI’s models are foundational to how we build,” says Sanket Shah, co-founder and CEO of Invideo AI. “They help us deliver professional quality videos to users and push traditional boundaries.”

Together, the announcements reflect a broader shift: AI is moving from peripheral support to production backbone. A handful of AI-films and OTT shows are already on the floor and set for release this year.

“With Invideo, it’s about building the future we always wanted as creators,” said Vishal Balsara, Co-Founder of GoBo Labs. “It’s an opportunity to empower the creative process and shape how the next generation imagines stories.”

Producers are setting up their own AI-studios as well. Actor-filmmaker Ajay Devgn, for instance, last year launched Prismix, an AI-powered media venture designed to integrate artificial intelligence into films, series, music videos and digital content production at scale. Telugu film producer Dil Raju and Tamil music producer Tenma have also set up AI-studios early this year.

The momentum is backed by market forces. India’s AI market is projected to triple to nearly ₹1.4 lakh crore ($17 billion) by 2027, according to a Boston Consulting Group (BCG) report titled “India’s AI Leap: BCG Perspective on Emerging Challengers.” 

The study highlights a rapidly maturing ecosystem, supported by more than 600,000 AI professionals, 700 million internet users, and over 2,000 AI startups launched in the past three years.

For the media and entertainment industry, these developments mark a pivotal inflection point when viewed against the scale of India’s advertising industry (₹1 lakh crore) and the entertainment sector (₹2.5 lakh crore).

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Cost Factor

Across scripting, pre-visualisation, editing and post-production, AI has moved from a peripheral tool to a creative co-pilot. Producers admit that AI-led projects are “easier to plan, faster to execute, and far less drama-prone than star-driven shoots.” 

The financial logic is difficult to ignore. Large-scale mythological or historical films — typically among the most expensive genres — can cost between ₹150 crore and ₹400 crore and take two to three years to produce. Industry executives estimate AI-led workflows could reduce budgets by 50–90% while shortening production cycles to under 12 months. 

“As studios balance shrinking budgets with the need for constant output, AI is emerging as a practical ally,” says Pep Figueiredo, COO - PTPL India, ex-SonyLIV. “By reducing dependence on actors, their tantrums and entourage costs and by accelerating workflows, and enabling creative experimentation, AI is redefining how Indian filmmakers tell stories in an age of economic caution and fleeting viewer attention.”

The timing aligns with mounting economic pressure. India produces 1,500–2,000 films annually across languages, alongside more than 900 television channels and over 50 OTT platforms. The broader media and entertainment sector generates nearly ₹2.5 lakh crore in annual revenue. 

With content costs rising and viewer attention fragmenting, studios are under pressure to increase output without proportionally increasing capital expenditure.

The shift extends beyond individual studios. Collective Artists Network has introduced an integrated AI production layer through its tech arm, combining VFX, 3D animation and generative pipelines into a unified system. Streaming major JioHotstar is backing Mahabharat: Ek Dharmayudh, described as India’s first fully AI-produced web series — underscoring how mythology and history are emerging as early beneficiaries of AI’s scale and cost advantages.

Executives say the implications are structural. AI tools are now being deployed to analyse audience cohorts, identify narrative patterns, assist in talent discovery and simulate complex environments that would otherwise require expensive physical infrastructure. Parts of the production chain are steadily turning virtual, altering not just budgets but the very architecture of filmmaking.

“AI coupled with the rising wave of microdramas with duration between 2–5 minute snackable stories now clocking billions of daily views across Reels, we can see a new business model brewing. Instead of waiting for a big OTT drop, brands can churn high-quality, AI-assisted micro-content that hooks audiences instantly,” says a filmmaker.