The news: Netflix is going “all in” on AI, making the tool a core part of how content experiences are built, customers are acquired, and ad campaigns are targeted and planned.

“We’re confident that AI is going to help us and help our creative partners tell stories better, faster in new ways, we’re all in on that,” Netflix co-CEO Ted Sarandos said on the company’s Q3 earnings call.

Netflix is focusing its AI investments on product experiences, content production, and advertising.

Zooming out: The company said that AI and machine learning (ML) have been built into Netflix’s infrastructure for years, including its title recommendation algorithms and promotion technology.

Now, the company is using genAI for content discovery by beta testing a “conversational search” feature. Netflix teased plans for an OpenAI-powered search feature in April 2025 that could simplify and personalize users’ content discovery journeys.

Yes, but: GenAI’s role in content creation, particularly in the film industry, is raising red flags for many artists and actors. But, Netflix isn’t concerned—“We’re not worried about AI replacing creativity, but we’re very excited about AI creating tools to help creativity,” Sarandos said.

The public may not agree: Only 16% of US adults say AI will improve people’s ability to think creatively, per Pew Research. For now, Netflix appears to have AI cast mostly in pre- and post-production roles, like for de-aging actors in “Happy Gilmore 2” or visualizing wardrobe and set designs for “Billionaires’ Bunker.”

Looking ahead: Netflix is also laying out plans for where AI will fit into its ad business, including enhanced data offerings and analysis.

• In Q4, Netflix will use AI to test new ad formats, help advertisers generate creative and optimize placement, and expedite media planning.
• In 2027, the streamer will make “more focused investments” in data capabilities like ML-based optimization, measurement, and advanced targeting.

Our take: Despite Netflix’s “all in” attitude, consumers are still hesitant about genAI content in creative fields, including genAI advertisements. CMOs should innovate responsibly by testing AI-driven creative tools where they can enhance performance while maintaining transparency and human oversight.

Piloting AI in infrastructure tools—such as website search and customer service agents—rather than creative content could also help customers be more comfortable with its applications.