Hollywood is having a new kind of blockbuster; one not produced in Los Angeles, but coded in Beijing.
A powerful artificial intelligence system called Seedance 2.0 has ignited alarm across the global entertainment industry.
Developed by TikTok parent company ByteDance, the AI model can generate cinema-quality video complete with dialogue, sound effects, and dynamic action sequences, all from just a short written prompt.
The technology’s rapid evolution and its apparent use of well-known copyrighted characters have triggered legal warnings from major studios, including Disney and Paramount.
But beyond copyright disputes, the deeper concern lies in the future of filmmaking, jobs and global AI competition.
What Is Seedance 2.0?
Cquietly launched the first version of Seedance in June 2025. It was the upgraded Seedance 2.0, released eight months later, that stunned creative professionals.
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Like OpenAI’s Sora and image generator Midjourney, Seedance transforms text prompts into moving visuals. Bu this model goes further by seamlessly integrating text, video and audio into a single coherent production.
Jan-Willem Blom of creative studio Videostate says the leap is undeniable.
“For the first time, I’m not thinking that this looks good for AI,” Blom says. “Instead, I’m thinking that this looks straight out of a real production pipeline.”
Western AI video tools have improved at interpreting user prompts, but Seedance appears to have mastered cinematic timing, camera movement, lighting, sound design and action choreography all at once, he adds.
The results have gone viral.
Clips circulating online show hyper-realistic sequences featuring characters resembling Spider-Man, Deadpool and Darth Vader.
One widely shared test features a remarkably lifelike rendering of Will Smith eating spaghetti, an informal benchmark used by AI developers to test realism. Seedance’s version goes further. It showed the actor battling a spaghetti monster in what resembles a high-budget action film.
Observers say the realism crosses a threshold.
David Kwok, founder of Singapore-based animation studio Tiny Island Productions, says the tool feels like a professional collaborator.
“It almost feels like having a cinematographer or director of photography specialising in action films assisting you,” Kwok says.
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Hollywood Pushes Back
The excitement quickly turned into legal tension.
Major studios including Disney and Paramount, have accused ByteDance of copyright infringement. It came after viral clips featured characters tied to Marvel, Star Wars and other protected franchises. The companies issued cease-and-desist letters demanding that Seedance stop generating content based on their intellectual property.
Japan has also launched an investigation into ByteDance following the spread of AI-generated videos featuring popular anime characters.
ByteDance responded by saying it is strengthening safeguards to prevent misuse of copyrighted material. However, copyright disputes are not new to the AI sector.
In 2023, The New York Times sued OpenAI and Microsoft, alleging that they had unauthorizedly used its journalism to train AI systems. Reddit filed legal action against Perplexity over scraped user posts. Disney has also raised concerns with Google regarding AI training data.
AI ethics researcher Margaret Mitchell argues that technical progress alone is not enough.
“Clearly labelling content to prevent deception and building public trust in AI is far more important than cooler-looking videos,” Mitchell says.
She adds that developers must design licensing frameworks and compensation systems that allow creators to be paid when their work informs AI outputs. Clear mechanisms for contesting misuse are essential.
Some companies are already negotiating structured agreements. Disney reportedly signed a $1 billion deal with OpenAI’s Sora platform to license characters from Marvel, Pixar, and Star Wars.
Shaanan Cohney, a computing researcher at the University of Melbourne, suggests ByteDance may have anticipated the controversy.
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“There’s plenty of leeway to bend the rules strategically, to flout the rules for a while and get marketing clout,” Cohney says.
While major studios worry about control, smaller production houses see opportunity.
Kwok explains that Asia’s booming micro-drama industry operates on tight budgets; often around $140,000 for up to 80 short episodes under two minutes each. To control costs, producers typically stick to romance or family dramas that require minimal special effects.
Seedance could change that equation.
“AI of this quality allows low-budget productions to expand into more ambitious genres such as sci-fi, period drama and action,” Kwok says.
For independent creators, generative AI reduces the need for large crews, expensive sets and complex post-production pipelines. Visual effects that once required specialized teams can now be simulated with text prompts.
However, the same technology that empowers small studios also threatens traditional production jobs. It brings obstacles for visual effects artists, junior editors and sound designers.
Is China Pulling Ahead in AI?
Seedance’s release also highlights a broader geopolitical shift.
“It signals that Chinese models are at the very least matching at the frontier of what is available,” Cohney says. “If ByteDance can produce this seemingly out of nowhere, what other kinds of models do Chinese companies have in store?”
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The momentum follows last year’s surprise rise of DeepSeek, a Chinese large language model that briefly overtook ChatGPT as the most-downloaded free app on Apple’s US App Store.
Beijing has made artificial intelligence and robotics central to its economic strategy. The government is investing heavily in advanced chip production, automation and generative AI to strengthen technological independence and global competitiveness.
While Seedance 2.0 captured headlines, several other Chinese firms quietly launched generative AI products ahead of the Lunar New Year. The Spring Festival is becoming an “AI holiday,” as millions of users experiment with new apps during the extended break.
China analyst Bill Bishop predicts that 2026 could mark a turning point for AI adoption across the country, not just chatbots, but AI agents handling payments, coding assistants integrated into workplaces, and video creation tools embedded in everyday content production.
Seedance 2.0 represents more than a flashy demo. It forces urgent questions about ownership, authenticity and the economics of creativity.
Can AI-generated cinema coexist with traditional filmmaking? Will licensing systems evolve quickly enough to protect creators? How will audiences distinguish between human-crafted storytelling and machine-generated spectacle?
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For now, the industry stands at a crossroads.
Hollywood’s legal teams are mobilising. Independent creators are experimenting. Policymakers are watching closely. And tech companies on both sides of the Pacific are racing to push the boundaries even further.
Generative AI video has entered a new phase. The credits have barely begun to roll.
