Shanghai festival showcases world’s first fully AI-produced animated feature

The Shanghai International Film Festival has evolved from a regional showcase into a global laboratory where traditional filmmaking collides with cutting-edge technology. The 27th edition, which concluded recently, delivered clear signals that China’s entertainment industry is accelerating its international expansion through strategic technological adoption and market consolidation.

This transformation matters because Shanghai is positioning itself as the bridge between Eastern and Western entertainment markets while simultaneously pioneering AI applications that could fundamentally reshape how content gets produced worldwide. The festival’s bold moves—from merging traditional film and TV markets to showcasing fully AI-produced features—offer insights into where the global entertainment industry might be heading.

Market merger creates new industry template

The festival’s most significant structural change was the historic merger of the Shanghai International Film Festival (SIFF) Film Market with the Shanghai TV Festival Market. This consolidation created a unified International Film & TV Market that reflects how content creators increasingly work across multiple platforms rather than staying confined to traditional film or television boundaries.

Chen Guo, managing director of the Shanghai International Film & TV Events Center, explained that the merger addresses “the industry’s evolving trend where content creation, technological applications, and talent mobility increasingly blur the lines between film and television.” The practical result is a single marketplace where filmmakers, TV producers, streaming executives, and technology companies can conduct business under one roof.

Housed in the sprawling 93,000 square meter Shanghai Exhibition Center, the merged market introduced a dual-track model that combines professional industry networking with public cultural experiences. This approach allows industry professionals to conduct business while simultaneously engaging general audiences through screenings, exhibitions, and interactive experiences. The format could influence how other major festivals balance commercial and cultural objectives.

AI takes center stage with ambitious production showcase

China’s entertainment industry made its boldest statement yet about artificial intelligence adoption through the launch of the Kung Fu Film Heritage Project. This ambitious initiative plans to use AI technology to restore 100 classic martial arts films featuring legends like Bruce Lee, Jackie Chan, and Jet Li, while simultaneously preserving cultural heritage and creating new revenue streams from classic content.

The festival also premiered “A Better Tomorrow: Cyber Border,” marketed as the world’s first fully AI-produced animated feature film. Producer Zhang Qing revealed that the animated film required just 30 people to complete, compared to the hundreds typically needed for traditional animation projects. This dramatic reduction in personnel demonstrates how AI has “collapsed the barrier between creativity and execution” while reducing production cycles “from years to months.”

These efficiency gains have significant economic implications. Traditional animated features often require 200-300 artists working for 2-3 years, with budgets reaching $50-100 million for major productions. If AI can deliver comparable quality with 30 people in a fraction of the time, it could democratize animation production while dramatically reducing costs.

The festival’s UHD HUB (Ultra High Definition Hub) featured dedicated experience zones for AI and extended reality (XR) technologies, including live demonstrations of multi-language AI voice-over and video translation systems. These tools are designed specifically to help Chinese content reach global audiences more efficiently by automatically generating dubbed versions in multiple languages. Officials emphasized that national render farms—massive computing facilities dedicated to processing visual effects—located in Guizhou province have already cut visual effects processing time from over 400 days to just 24 hours.

Record international engagement signals global ambitions

The festival achieved unprecedented global participation with over 2,800 film submissions from 119 countries and regions, marking notable increases from the Americas and Africa. Short film submissions alone rose 18% year-over-year, while programming featured more than 400 films from 71 countries, with nearly half being various types of premieres.

This international reach is amplified through the Belt & Road Film Festival Alliance, a diplomatic and cultural initiative established in 2018 that now includes 55 member festivals from 48 countries. The alliance facilitates cultural exchange and co-production opportunities, with this year’s festival featuring special focus events including “Focus on Russia” and “Focus on Thailand.” This framework positions Shanghai as a crucial bridge between Eastern and Western cinema cultures, with Chen Guo emphasizing the festival’s role in “bridging Eastern and Western civilizations.”

The Belt & Road Initiative itself is China’s massive infrastructure and economic development strategy spanning Asia, Europe, and Africa, and the film alliance represents its cultural diplomacy component. By connecting film festivals across these regions, China is creating pathways for its entertainment content to reach new markets while building cultural relationships that could facilitate broader economic cooperation.

Chinese cinema demonstrates growing international appeal

While Kyrgyzstan’s “Black Red Yellow” claimed the top Golden Goblet prize—the festival’s highest honor—Chinese films dominated other major categories. Local productions won multiple awards including the jury grand prix for “Wild Nights, Tamed Beasts,” best director for “One Wacky Summer,” and best actress for Wan Qian. This strong showing reflects what Chen characterized as growing international attention following “the sensation caused by Chinese-language films such as ‘Ne Zha’ on the international stage.”

Public enthusiasm reached record levels, with 73% of screenings selling out within six days of tickets going on sale. More than 600 screenings sold out within the first hour, indicating strong domestic appetite for both international and local content. The festival expanded beyond Shanghai proper, screening films in five Yangtze River Delta cities and introducing tourism-focused initiatives including partnerships with local cafés, restaurants, and cultural attractions.

This audience engagement is particularly significant because it demonstrates that Chinese consumers are willing to pay for premium entertainment experiences, validating the market’s potential for both domestic and international content creators. The festival’s expansion into surrounding cities also reflects China’s broader strategy of developing entertainment ecosystems beyond major metropolitan centers.

Technology integration points toward industry future

The festival’s embrace of emerging technologies extended beyond AI to include virtual reality (VR) works entering SIFF’s official programming for the first time. The SIFF ING-AIGC program specifically highlighted young creators utilizing AI in their projects, while maintaining what Chen described as the principle that “digital technology brings not only innovations in creative media and methods but also new ways of thinking about creation.”

This technological integration represents more than just novelty—it signals a fundamental shift in how content gets conceived, produced, and distributed. Traditional film production involves lengthy pre-production phases, expensive equipment, and large crews. AI and VR technologies are compressing these requirements while opening new creative possibilities.

Italian master Giuseppe Tornatore, who served as jury president, emphasized the festival’s international character while noting the quality of submissions. The diverse 21-member Golden Goblet awards jury represented 13 countries across Asia, Africa, the Americas, and Europe, reinforcing the festival’s global credibility and its ability to bridge different cinematic traditions.

Strategic implications for global entertainment

Shanghai’s approach suggests a template for how major festivals might evolve to address changing industry dynamics. The merger of film and TV markets acknowledges the reality that content creators increasingly work across platforms, while the public-facing elements recognize audiences’ desire for immersive cultural experiences beyond traditional screenings.

The aggressive AI showcase positions China as willing to move faster than Western markets in adopting transformative technologies, potentially creating competitive advantages in production efficiency and global content distribution. While Hollywood continues debating AI’s role in filmmaking—with recent strikes partly centered on AI concerns—China is actively demonstrating practical applications that could reshape industry economics.

Looking ahead, Chen indicated plans for the merged market’s continued refinement focused on internationalization, industry leadership, and enhanced interactivity. The goal is to establish it as “a new cultural landmark that embodies Shanghai’s distinctive charm” while serving as a vital platform for the city’s entertainment industry growth.

The 2025 edition’s success suggests Shanghai has evolved from regional festival to global industry laboratory, where traditional filmmaking meets cutting-edge technology and East-West cultural exchange accelerates. This evolution could provide a roadmap for how entertainment industries worldwide adapt to technological disruption while maintaining cultural authenticity and international appeal.