“Tools are never the point. The instruments change with every generation. What endures is taste and imagination.”

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A few months ago, I sat in my office in Silicon Valley and watched as a tech founder showed me something extraordinary. On the screen was a fully realized, beautifully lit, well-composed animated scene. It was stunning and it made me feel exactly what I felt in 1986 watching Luxo Jr. That was the first time I watched a computer-animated 3D character take a breath and seem, against all reason, to have life. It left me in awe.

Later that day, I received a text from an artist I’ve known for thirty years, 350 miles to the south, in the city where I spent most of my career. After seeing a similar video, she texted: “Is this the end of us?”

My answer was, “Certainly not.”

I have spent the better part of the last decade in Silicon Valley, but the heart of my career has been in Hollywood. Being deeply connected to both worlds means I have deep loyalties to each and a responsibility to speak honestly to both.

In 2023, I said that these new AI tools would cut the time and cost of producing world-class animation by as much as ninety percent within three years. Some colleagues were alarmed, many were furious.

There is growing fear and resistance surrounding AI within the creative community. I deeply understand it, because I’ve spent countless hours walking through animation studios watching gifted artists bent over their desks, rebuilding a single second of film for the tenth time because the ninth version wasn’t quite right.

I’ve sat in screening rooms where four years of people’s labor played out in minutes, and I knew the name of every person that had spent countless hours bringing those images to life.

The creative process is a calling, there’s really no other way to describe it. From the outside some see resistance. From the inside, it is love.

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“From the outside some see resistance. From the inside, it is love.”

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People do not fight this hard for things they don’t care about. The pushback coming out of Hollywood represents the collective effort of people who are deeply passionate about their craft.

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Is History Repeating Itself?

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From the phonograph to the talkies, every technological leap has cost someone their livelihood — and every one has been settled by the terms.

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The history hereis more complicated than either side may realize. In 1906, the most famouscomposer in America, John Philip Sousa, published an essay titled “TheMenace of Mechanical Music.” He warned that the phonograph would become “asubstitute for human skill, intelligence and soul.”

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Sousa’s fightwas not really about the machine, it was about money. The machines were playinghis compositions, and the men who built them weren’t paying him a cent. Hiscampaign helped create the Copyright Act of 1909. He did not stop the technology. Hechanged the terms under which it could use his work.

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A hundred yearsago, sound came to the movies. We remember it now as a miracle, and it was.What we forget is who paid for it. Before sound, tens of thousands of musiciansmade their living in the orchestra pits of movie houses, scoring every filmlive, every night, in towns all over the world. When the soundtrack arrived,the work of one composer and one orchestra was recorded for a film that wentinto thousands of theaters. The union fought back with everything it had,taking out newspaper ads across the country warning against the menace of“canned music,” one of them showing a mechanical man tearing the strings out ofa harp while an angel wept.

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They were notfools, and they were not Luddites. They were right. Those pit jobs did not comeback. And yet (this is the part we have to be brave enough to admit), soundgave us the movie musical, the modern score, sfx, sound design, audioengineering, and an art form vastly larger than the one it disrupted. And ithelped keep Hollywood in the forefront of world entertainment for the rest ofthe century and into the next. The loss was real. And yet the art form expanded.

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This is a storythat has been told over and over again. To resist technology is to riskirrelevance. Just look at Kodak or Blockbuster. To embrace technology is toopen doors of new possibility. Just consider Apple and Netflix.

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What I Learned From Walt Disney

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Walt never defined animation by the tools. He defined it by whether the audience believed the character.

In themid-1980s, I was tapped to lead Disney’s animation division at a moment whenthe studio was at an inflection point. Animation wasn’t just another businessunit. It was the soul of the company, a medium revered because of Walt’s geniusand his passion. But the production system was cumbersome and unforgiving. Asingle movie was 125,000 individual hand-drawn and painted cels, photographedone frame at a time. Every revision carried a cost measured in months. Thesedegrees of difficulty shaped the kinds of stories we could tell.

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We found ourway forward in an unexpected place: Walt himself. The Disney archives heldastonishing recordings of Walt explaining his creative process. His ownwritings. His notes and storyboards. Work product captured at every stage ofhis process. This was truly a gift. Listening, reading, sitting with the workitself, we heard him talk about character, about emotion, about how an audiencefeels when a character truly comes alive. He talked about making bold choicesand refining a scene until it genuinely moved people. We didn’t hear a wordabout pencils or paintbrushes. In fact, Walt was famous for being atechnologist, forever hunting for state-of-the-art tools, often inventing themhimself to achieve the images he saw in his head. But he never definedanimation by the tools. He defined it by whether the audience believed thecharacter. Hisprinciples were timeless. The tools were not.

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Thatrealization changed everything. We co-developed the Computer AnimationProduction System (CAPS) with a young Northern California company called Pixar,replacing hand-painted cels with CGI. In The Little Mermaid, the finalscene shimmered with a dimensionality and light that the old process simplycouldn’t achieve. In Beauty and the Beast, the ballroom sequence movedwith a cinematic sweep that placed the audience inside the emotion of themoment. In Aladdin, the Cave of Wonders felt vast and alive, and theMagic Carpet became an intricate, compelling character all its own. In TheLion King, the stampede carried a scale and intensity that raised theemotional stakes beyond anything we’d done before. Technology didn’t diminishthe craft, it expanded the canvas. It gave artists more room to create.

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A decade later,the canvas expanded again. When Disney released Pixar’s Toy Story, itwasn’t simply a technical milestone. It was proof that a fullycomputer-animated film could carry real emotional weight, that it could makeaudiences laugh, cry, and believe. At DreamWorks, we made the difficultdecision to sunset hand-drawn animation and become a fully computer-animatedstudio. It was the right thing to do, but it was not without pain. It costtalented people their place in an industry where they had worked their wholelives. Some made the leap to the new tools and did the finest work of theircareers. Some never did.

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Tools are neverthe point. The instruments change with every generation. What endures is tasteand imagination. The magical ability to make an audience feel. One of thegreatest storytellers of our generation, George Lucas, succinctly captured theeternal essence of this issue: “It’s not the how, it’s the why.”

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“It’s not the how, it’s the why.” — George Lucas

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A Distinction With a Difference

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Why the line between reasoning and creating is where the two worlds will find common ground.

I asked one of the leading AI models a questionthat has been challenging me for months. What is the difference betweenreasoning and creating? Its answer changed how I think about almost everythinghappening in this industry. It said . . .

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Reasoningand creating are two distinct cognitive modes, though they also work together.Reasoning is fundamentally evaluative and analytical. It operates on whatalready exists: facts, premises, evidence. It moves toward a conclusion thatwas in a sense already implied by the input. Reasoning is constrained by logicand truth. Its goal is to arrive somewhere correct, not to invent somewherenew.

Creatingis fundamentally generative. It produces something that didn’t exist before.And crucially, there’s no single right answer waiting to be found. A blank pagehas infinite valid responses. Creation involves choices that can’t be fullyjustified by logic alone. Taste, intuition and vision fill the gap wherededuction runs out.

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Reasoning is what Silicon Valley has been perfecting. Creating is whatHollywood has been practicing for more than a century. AItoday operates almost entirely on the reasoning side of the line. It candeduce, evaluate, optimize, and pattern-match brilliantly. And while it cancreate, there is a real distinction to being creative. What it doesn’t yet haveis those things that make us human: empathy, devotion, serendipity, the kind ofcreativity that comes from a person trying to say something only they couldsay. When the bot generates a piece of art, it is not trying to communicateanything. It is statistics, not soul; it is emulating things that have beendone. By contrast, human creativity isn’t about repeating patterns of zeros andones; it is about doing something new.

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One day, AI mayclose this gap. Three years ago, the leaders building AI would have called whatthey are achieving today, improbable, if not impossible. Impossible is nolonger improbable.

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Today, the linebetween reasoning and creating is real. Even the leading technologistsacknowledge we are not there yet. There is no scientific path to crossing thisdivide that anyone in the field can articulate today. Understanding that gap iswhere we will find common ground.

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A Path Forward

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Credit, consent and compensation — why the terms, not thetools, will decide what comes next.

In 2016, Iclosed one chapter in Hollywood with the sale of DreamWorks and opened anotherin Northern California, co-founding WndrCo. We’ve backed more than 50 foundersbuilding the next generation of technology and watched how breakthroughs inSilicon Valley emerge, first as experiments, then as platforms, and finally asinfrastructure that reshapes entire industries. It’s worth remembering that thelast great revolution in animation also came from the north. Pixar was aNorthern California company, forged not in the conventions of the Hollywoodstudio system, but in the technological breakthroughs of Silicon Valley. I’vespent years on both sides of this bridge. For sure, I don’t have all theanswers (take Quibi, for one!). But, from my past and present vantage points ofmy long career, here is what I see . . .

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Brilliantpeople in Northern California building this technology have made somethingextraordinary. They have earned the right for the rest of us to be, if notbelievers, at least optimistic that what comes next will be remarkable. Butthey have not made an artist. The tools are powerful, but they are not whatmakes a story matter. That knowledge lives 350 miles to the south, insidepeople whose life’s work has informed the very models you are building. Theright path forward includes them by design, with credit, with consent, and withcompensation. Buildthis with the storytellers. Not on top of them. Taste is not something that can be synthesized, it isuniquely human.

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“Build this with the storytellers. Not on top of them.”

At the sametime, Hollywood needs to accept that AI is not going away. The energy they arespending trying to make it disappear is energy they are not spending decidingthe terms on which it will exist. And the terms are everything. The north needssomething from it that they cannot build and cannot buy: creativity. The kindthat takes a blank page and conjures a single right answer where there was noneand has held audiences for a century. Without it, the most powerful reasoningengine ever invented will still be missing the only thing that makes a storyworth telling.

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The artists wholearn to wield these new instruments will do things the engineers never dreamedof. They always have. Edison invented the motion picture but made terriblemovies. It took Chaplin, Lloyd, Keaton and so many others to make moviesemotional. Now, the canvas is about to expand yet again. We should decide nowthat we intend to paint on it.

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There are somany valuable lessons in history. This has happened many times before, and itwas never settled by the technology. It was settled by the terms. Sousa did notstop the phonograph; he helped write the law that made sure composers got paid.And two years ago, when the writers and the actors walked out, they werefighting for the very things Sousa was fighting for in 1906. Consent,compensation, the basic recognition that human creative work has a price thatmust be paid. The terms of that fight are still being negotiated, but theprinciple is older than any of us.

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Thetools-versus-no-tools argument is a trap. First, we must all agree that thereshould be terms. Then we can have the crucial debate about what fairnessrequires.

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Technology & Storytelling — A Century of Disruption

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1906 — The Phonograph

Sousa warns of “The Menace of Mechanical Music.”

Fear: Machines replace human skill.
Outcome: The Copyright Act of 1909. The technology stayed, but composers won the right to be paid.

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1920s — Sound Comes to the Movies

Tens of thousands of theater musicians lose their livelihoods.

Fear: “Canned music.”
Outcome: The pit jobs never returned, but sound gave rise to the movie musical, the modern score and sound design.

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1989 — Disney × Pixar CAPS

Hand-painted cels give way to computer production.

From The Little Mermaid to The Lion King, technology expanded the canvas rather than diminishing the craft.

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1995 — Toy Story

The first fully computer-animated feature film.

Proof that CG could carry real emotional weight. DreamWorks later sunset hand-drawn animation: the right call, but not a painless one.

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2023–Present — Generative AI

Writers and actors strike; AI video reaches studio quality.

The fight is once again about the terms: credit, consent and compensation for the human work that informs the models.

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What I Learned From Steve Jobs

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Technology alone is not enough.

Years ago, Steve Jobs said, “It’sin Apple’s DNA that technology alone is not enough. It’s technology marriedwith the liberal arts, married with the humanities, that yields us the resultthat makes our hearts sing.” He was describing a device. But he could just aseasily have been describing this tale of two cities.

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What I See Coming Soon

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More films, more risks, more seats at the table.

As the barriersand the costs come down, more films will get made, not fewer. Studios will getto take more risks. There will be more seats at the table, and very soonentirely new forms of storytelling. In the 1980s, animation was dismissed as aniche corner of the business. Today it is one of the most beloved andprofitable forms of storytelling in the world. In live action, filmmakers likeSteven Spielberg, James Cameron and Peter Jackson embraced new visual tools notas shortcuts, but as instruments, and expanded cinema in the process. Everytime storytelling has met a genuine technological shift, from synchronizedsound to color to computer animation, it has redefined the boundaries of themedium and grown larger in the process.

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Assuredly, Idon’t have all the answers, but I am confident that the creative opportunitieswill expand yet again. How we come through this is a choice. The north has the new tools. Thesouth has the creative soul. The best future will draw on the best of bothworlds.

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About the Author

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Jeffrey Katzenberg isco-founder and managing partner of WndrCo, which invests in technology andmedia businesses. As Chairman of The Walt Disney Studios from 1984 to 1994, heoversaw the animation renaissance that produced The Little Mermaid, Beauty andthe Beast, Aladdin and The Lion King. He went on to co-found DreamWorks SKG in1994 and led DreamWorks Animation as CEO until its sale to NBCUniversal in2016.

Jeffrey Katzenberg, “The World is Changing: AI For Creativity,” X (@jeffreykWNDR), 24 September 2026

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