Google’s Veo 3 Breaks Hollywood – And Wall Street Isn’t Ready

A few weeks ago, within the flurry of social media posts surrounding his feud with President Trump, Elon Musk made an astute observation.

“AI video generation is advancing at the speed of light.”

He is, of course, referring to Veo 3, Google’s latest AI video model. It can create high-quality, cinematic-level clips – complete with realistic visuals, synced audio, and dramatic camera movement – all from a simple text prompt.

For example, if you were to type: “A medium shot, historical adventure setting: Warm lamplight illuminates a cartographer in a cluttered study, poring over an ancient, sprawling map spread across a large table. Cartographer: “According to this old sea chart, the lost island isn’t myth! We must prepare an expedition immediately!” Veo 3 can create a fully rendered video that captures that scene within moments. No camera crew, actors, or editors – just AI.

It is the latest and most impressive model in a string of rapid advancements in AI video generation. 

And the pace of this progress emphasizes one big-picture idea – with vast investment implications… 

In our view, Hollywood as we know it is about to become extinct. 

How AI Video Is Replacing Hollywood’s Outdated Model

See; classic Hollywood is bloated. 

Historically, movie production has required countless roles, massive budgets, and, often, excessive amounts of time. You need writers, directors, actors, set builders, sound engineers, costume designers, editors, distributors… It is arguably one of the most complex, costly, and time-consuming processes in the world. 

But now it seems likely that Big Tech will soon be able to bypass nearly all of that overhead. 

With just a prompt, a powerful model, a GPU cluster, and a platform, AI can deliver near-masterpieces.

Take Alphabet (GOOGL), for example. Its Gemini language model could write the plot, which could then be fed into Veo 3 to generate the actual movie. Its SynthID could watermark it. Then, it could distribute the film through YouTube – which it owns – and monetize it with ads. 

It is a full tech stack perfectly suited to create, produce, distribute, and monetize a movie. 

Why pay for a $200 million studio film when your AI stack could test 10 versions of a story, optimize the thumbnail, target it to viewers, and go live in an afternoon for a fraction of that cost?

Big Tech Has the Data – and Now the Tools – to Win With AI Content

Though, production speed and cost are not Big Tech’s only advantages in this new era of AI content generation. Soon enough, quality will emerge as the biggest advantage of all.  

That’s because while Hollywood tries to guess what you’ll watch next, Big Tech actually knows. It doesn’t just have AI models; it has vast amounts of behavioral data garnered from various surveillance-based business models.

Just consider YouTube. It knows:

• How long you watch a video
• Where you drop off 
• What you click next
• What visuals get your attention
• What audio hooks keep you tuned in

Of course, in terms of user privacy, it’s a nightmare… 

But for engineering content, it’s a silver bullet.

Hollywood rolls the dice on each release. But YouTube has the potential to run millions of real-time A/B tests and then release the winner. Gambling vs. science.

Not to mention, with 2.7 billion users and over 120 million daily viewers, YouTube is already the most-watched video platform on Earth. 

In fact, more content is uploaded per minute to YouTube than Hollywood produces in a year. 

It has built-in monetization with ads, real-time analytics, instant global distribution… 

And now Veo 3 – the AI video generation model that can turn text prompts into Hollywood-quality video. 

With that setup, any creator could generate full scenes, trailers, and short films with just an idea and a prompt.

So, the next Spielberg? Probably some 15-year-old with a Chromebook and an AI co-pilot.