How AI made animation a mass industry in China
By slashing costs and production times, AI has turned animation in China from a studio-led craft into a mass industry. Thousands of short drama series are now made by small teams and individual creators, says Chinese technology expert Yin Ruizhi.
Over the past few months, artificial intelligence (AI) has been driving the rapid emergence of a brand new industry in China: AI-animated dramas.
Drastic cuts to production cost and time
AI-animated dramas use AI to replace the traditional animation process that requires a series of manual drawing and other steps. Once the copyright to the original story or novel has been secured, producers can rely solely on text prompts for various AI tools to complete the entire animation production process, including script, storyboarding, animated video, dubbing and soundtrack.
At the start of 2024, the Chinese AI-animated drama market was worth less than 3 billion RMB (US$428 million); by the end of 2025, it had increased sevenfold to 20 billion RMB. In 2024, China’s total annual box office revenue for films nationwide is around 42.5 billion RMB. This means that within just a year, the AI animation market has grown to roughly half the size of the entire film box office market. What is even more exciting is that growth in this sector is still accelerating.
In Q1 2024, when this industry began to emerge, China produced only about 50 AI-animated dramas per month. By Q4 2024, monthly production across the country had reached around 1,000. At the time of writing in December 2025, China produced roughly 300 AI-animated dramas per day — more than 10,000 per month. Japan, widely recognised as a global animation powerhouse, produces only about 300 animated series in an entire year.
... production time has been compressed from several months to within 15 days. This is the most eye-catching achievement of China’s large AI models and AI agents in the field of animation.
Beyond market size and industry output, the most noteworthy aspect is the cost of AI-animated series. Traditional animated dramas cost around 20,000 to 30,000 RMB per minute. By using AI tools, the cost has now been steadily reduced by more than 90% to less than 2,000 RMB (and continues to drop). At the same time, production time has been compressed from several months to within 15 days. This is the most eye-catching achievement of China’s large AI models and AI agents in the field of animation.
Compared with singular video generation, China’s AI agents and collaboration software have developed even faster due to a vast ecosystem of industry engineers.
AI tools developed in China
More than 80% of AI large models and agent tools in the Chinese AI-animated drama industry are developed by China itself. This high level of localisation is the main guarantee for the sharp reduction in costs.
Take video generation as an example: domestic models (such as Vidu Q1, priced at about 0.3 RMB per second) are ten times cheaper than similar models from the US, such as OpenAI’s Sora (US$0.3-0.5 per second (about RMB 2.2-3.6)), making them better suited to large-scale production.
Compared with singular video generation, China’s AI agents and collaboration software have developed even faster due to a vast ecosystem of industry engineers. Many AI agents integrate AI tools for the various stages of production, so there is no need to switch between software. A small team of four to five people can use a single AI agent software to generate a rough cut in just a day or two.
On such AI platforms, web novels can be adapted into scripts and the required storyboards can also be generated; key processes such as character design, AI dubbing and sound effects, as well as post-production, have all seen their costs reduced by 70% to 99%(!) compared with traditional animation production.
The US focuses on using cutting-edge foundational AI technologies to attract market investment, whereas Chinese AI teams from the very start placed an emphasis on practical application.
China versus US
The priorities of the AI industry in China and in the US follow completely different logics. The US focuses on using cutting-edge foundational AI technologies to attract market investment, whereas Chinese AI teams from the very start placed an emphasis on practical application. When AI large models first achieved text-to-video generation, it was American models that initially captured market attention, even as Chinese companies such as ByteDance were already delivering similar results at the time.
International media outlets also almost unanimously concluded that American AI technology was far ahead of China in this field (in my earlier essays on AI, I argued that public opinion had overestimated the US’s lead in AI). Once text-to-video AI technology fully entered industrial applications, China had already caught up with — and in some areas even surpassed — the US in the technical aspect. The speed of development in China’s AI-animated drama industry has clearly overtaken that of the US; the sector is already generating stable profits.
China’s AI industry has reduced the cost of producing an animated series to around 200,000 to 300,000 RMB, which means even the average person can raise funds on their own and participate in this industry.
More importantly, China’s AI technology has enabled the animated series industry to complete a crucial step towards decapitalisation. Traditional animated series typically require investment of several millions or even tens of millions of RMB (this is the case globally), hence barriers to entry are very high, and capital support is essential to operate.
China’s AI industry has reduced the cost of producing an animated series to around 200,000 to 300,000 RMB, which means even the average person can raise funds on their own and participate in this industry. This would become a huge opportunity for young people in terms of entrepreneurship and employment, and it would have an immeasurably positive impact on the functioning of China’s entire socio-economic system.
While China’s AI animated dramas are developing at breakneck speed, many US scholars and media outlets are questioning whether there is already a huge bubble in this wave of AI. The subject of these studies and reports is often American companies, and sometimes only traditional American enterprises.
In China, both the authorities and the public have very positive expectations for the AI industry, and only a handful are worried about a bubble. This is closely linked to the Chinese AI sector’s more pragmatic approach and focus on profitability. In the future, China’s AI industry will bring about even more surprises as it transforms the various traditional sectors.
