The AI video industry experienced an unprecedented surge in 2025, with platforms and startups leveraging cutting-edge tools to create hyper-realistic content at scale.
As reported by Tech in Asia, this rapid growth has led to a crowded market by early 2026, setting the stage for a significant industry shakeout as competition intensifies.
The Rise of AI Video Technology
Historically, video production was a labor-intensive process, but AI innovations like OpenAI’s Sora have democratized content creation, enabling even small creators to produce high-quality videos.
This technological leap has not only transformed entertainment but also marketing, education, and social media, where AI-generated content now dominates feeds.
Impact on Creators and Consumers
The influx of AI videos has sparked both awe and concern, with millions of users often unable to distinguish between real and synthetic content.
Social media platforms, once platforms for authentic user content, are now grappling with an overload of what some call AI slop—low-quality, algorithmically generated videos.
Market Dynamics and the Shakeout
With hundreds of startups entering the fray, the market has become oversaturated, and only those with unique value propositions are likely to survive the impending consolidation.
Investors are becoming more selective, focusing on companies that can balance innovation with sustainable revenue models, as noted in recent industry analyses.
Future Outlook for AI Video
Looking ahead, experts predict that by 2027, the industry will pivot toward ethical AI usage and stricter regulations to combat misinformation and deepfakes.
Technological advancements will likely focus on smaller, more efficient models that prioritize quality over quantity, ensuring a more user-centric experience.
Ultimately, while the 2025-2026 boom has showcased AI’s potential, the shakeout will redefine the landscape, separating industry leaders from fleeting players.
Andrew Lee
