Goldman Sachs: AI pushes the supply of cultural and entertainment content toward near-unlimited levels, while the value of the production segment may remain under pressure.

Beating AI News Flash: Goldman Sachs’ latest research report points out that AI is reshaping China’s cultural and entertainment industry value chain. With content supply approaching infinity while user time and attention remain limited, this contradiction will drive industry profits to further concentrate on top IPs and distribution platforms. The report shows multimodal AI has cut production costs for animation, music, ad videos, short dramas and other content by 80% to 95%, lifting production efficiency by 5 to 10 times. In the first 8 months of 2026, the output of short dramas and miniseries grew 13 times compared to the full year of 2025, while new game releases increased by over 8 times. At leading short drama platform Hongguo, over 90% of episodes now use AI-generated content. Goldman Sachs notes that the boom in content supply brought by AI does not mean all segments of the industry chain will benefit. The value of traditional production and execution links will be compressed, while the scarcity of top IPs and creative assets will become more prominent. Content distribution platforms are expected to benefit from increased supply, but their competitive barriers built on copyrighted content libraries may be impacted by the flood of AI-generated content. In terms of specific sectors, Goldman Sachs believes online gaming is relatively more resilient, with leading players like Tencent and NetEase expected to leverage AI to extend the lifecycle of mature IPs. Long video platforms may see short-term benefits from lower costs, but face long-term pressures including declining user time and AI content eroding their advantages in copyrighted content. Additionally, AI-driven cultural entertainment still faces two major risks: monetization challenges and stricter regulation.