Artificial intelligence is becoming a growing part of China’s film and short-video industry, with local governments offering incentives to filmmakers and startups developing AI-generated content. Cities including Shenzhen, Shanghai and Beijing are providing support ranging from subsidized office space to computing resources, cloud-based AI models, computing vouchers and financial assistance.

The push is part of China’s wider effort to build domestic AI industries through local technology clusters and government-backed incentives. At the same time, lower production costs are encouraging filmmakers to experiment with AI-generated video.

AI filmmaker Zhu Zhili chose Shenzhen two years ago because of its technology ecosystem. He now says officials from cities and industrial parks across China regularly approach him about relocating his business.

Zhu, who also heads the AI-Generated Content department at China Wit Media, operates his personal studio from a shared workspace in Shenzhen with support from the city government and Hong Kong Polytechnic University.

He said government incentives include “cheap rent, living allowance and computing support”, helping filmmakers lower the cost of producing AI-generated content.

The cost of producing AI short dramas has also fallen sharply. According to China’s state broadcaster CCTV, production costs dropped from around 5,000 yuan (USD 747) per minute to a few hundred yuan during the first half of 2026.

Pan Xiaojun, a postgraduate film-directing student in Hainan, said AI significantly reduced the cost of producing a conventional wedding scene. A scene that could cost about 60,000 yuan to produce conventionally cost him around 1,400 yuan using AI.

This sharp reduction in production costs gives independent filmmakers and smaller studios more room to experiment with AI-based production.

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