By Lukas I. Alpert

Hot off the heels of its failed bid to buy Warner Bros. Discovery, Netflix made the biggest acquisition in its history for an AI tool that Affleck quietly developed to help filmmakers refine their work

Ben Affleck said he had developed his AI startup in secret, starting in 2022, before reaching a deal to sell it to Netflix for up to $600 million.

For years, Netflix has said it would rather build than buy to expand its business. Looks like things have changed.

Just days after walking away from a deal to buy Warner Bros. Discovery’s (WBD) studio and streaming businesses for $82.7 billion, Netflix (NFLX) announced it is acquiring Oscar-winning filmmaker Ben Affleck’s artificial-intelligence startup, InterPositive.

While Netflix didn’t disclose the financial terms of the deal, Bloomberg is now reporting that Netflix is set to pay as much as $600 million for Affleck’s company, which would mark the biggest acquisition in the streaming giant’s history.

So what exactly is Netflix buying?

Affleck – who won Oscars for best picture for “Argo” in 2012 and best original screenplay for “Good Will Hunting” in 1997 – said he began working in secret in 2022 with a small team of engineers to develop a suite of AI tools that could help filmmakers better refine their work.

The introduction of AI into Hollywood has been met with alarm by many in the industry who worry that studios will use the technology to cut costs by replacing human input.

Amazon.com (AMZN) has been working to develop AI tools for use at Amazon MGM Studios to reduce costs and speed up production. Late last year, Walt Disney Co. (DIS) reached a $1 billion deal with OpenAI to allow viewers to use Disney characters to create AI-generated videos.

Backed by sports and media entrepreneur Gerry Cardinale’s Redbird Capital Partners, InterPositive was designed for filmmakers to use AI to make changes or correct errors in the postproduction process, but not to actually make films itself.

“Intensive research and development led to our first model, trained to understand visual logic and editorial consistency, while preserving cinematic rules under real-world production challenges such as missing shots, background replacements or incorrect lighting,” Affleck said when the deal was first announced last week.

“We also built in restraints to protect creative intent, so the tools are designed for responsible exploration while keeping creative decisions in the hands of artists – and ensuring that the benefits of this technology flow directly back to the story they’re trying to tell,” he added.

Last year, Affleck began seeking further investment for the technology, meeting with venture capitalists and other potential backers, Bloomberg reported. But Netflix decided to acquire the company outright instead.

The cash price for the deal is lower than $600 million, Bloomberg reported, but will rise over time if certain performance targets are reached. Netflix said it is bringing InterPositive’s team on board and that Affleck will remain involved as a senior adviser.

Netflix said it sees the technology as an ideal in-house tool to help filmmakers produce better movies and television programming.

“Our approach to AI has always been focused on meaningfully serving the needs of the creative community and our members,” Netflix Chief Product and Technology Officer Elizabeth Stone said when the deal was announced. “InterPositive’s impressive technology is purpose-built for filmmakers and showrunners to work with tools that naturally support their creative visions and how they want to bring them to life.”

Netflix’s stock dipped 0.6% on Thursday, but outperformed the broader market, as the S&P 500 index SPX slid 1.5%.

Netflix announced the deal just a week after dropping its effort to acquire Warner Bros. studio and streaming service following being outbid by Paramount Skydance (PSKY).

-Lukas I. Alpert

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03-12-26 2034ET

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