Skydance Is Betting On AI To Help Dig Itself Out Of $87 Billion In Debt

Skydance has become the latest, and perhaps loudest, major Hollywood studio to explain how it plans to use AI to cut costs. After its $111 billion acquisition of Warner Bros. Discovery last month, the company is carrying $87 billion in debt and looking to slash expenses.

On Monday, Skydance outlined plans to save at least $6 billion a year within three years, with AI playing a key role in everything from office work and computer programming to film production. “Growing our business and paying down debt are our top priorities,” the company told shareholders.

In a letter to shareholders and subsequent earnings call, executives broke down where the savings will come from:

• Corporate operations: $2.2 billion. Combining departments, eliminating overlapping jobs, reducing office space, and using AI for administrative work.
• Technology: $1.4 billion. Combining streaming and computer systems, merging tech teams, and using AI coding tools.
• Marketing: $1 billion. Combining advertising campaigns and reducing promotional spending.
• Outside contractors and suppliers: $1.4 billion. Working with fewer vendors and negotiating cheaper contracts.

These are annual savings Skydance expects to achieve within three years, not $6 billion in total cuts. The company hasn’t specified how much AI will contribute or how much it expects to save on labor. Ellison also indicated that potential AI-driven savings in film production aren’t yet included in the company’s forecasts.

What about filmmaking? CEO David Ellison said AI would make production faster and cheaper, while insisting that “artificial intelligence is a tool for artists and will never be a replacement for them.”

At the same time, Ellison predicted that AI could transform filmmaking more dramatically than CGI and digital compositing did in the 1990s, adding that “every discipline across the business will use these tools and productivity will improve as a result.”

Ellison argued that lower production costs could encourage studios to take more risks on original films. But that raises an obvious question for artists: If studios can make the same content faster and cheaper, what happens to the people currently doing that work?

The cuts are already underway. Skydance has offered employee buyouts, and this week confirmed layoffs in its games division, where at least 25 workers have reportedly lost their jobs. On Monday, James Gunn and Peter Safran were also removed as DC Studios chiefs, with Variety reporting that disappointing returns on expensive projects contributed to their ouster.

Skydance hasn’t said which production jobs AI might affect or how many could disappear. But the company’s message to investors is clear: It intends to spend substantially less money running its businesses and producing films and series, and AI is a key driver of how it plans to get there.