Rapid Response: OpenAI’s Critterz blowback — Director Nik Kleverov on year zero for Hollywood

0:00Hey, folks, Jeff Berman here, co-host of Masters of Scale. I am thrilled to share some of the new names who will be joining us at this year's Masters of Scale Summit. They are the leaders driving the most pressing conversations in AI. Replit founder and CEO Amjad Massad, Cloudflare's Matthew Prince, Signal president Meredith Whitaker, and many, many more who will take the stage this October 20th through 22nd in San Francisco. We want you there with us, too. Join us at mastersofscale.com slash pioneers. That's mastersofscale.com slash pioneers.

1:00and the bottom line, how they navigate uncertainty, pressure, and high-stakes moments. I'm Bob Safian, former editor-in-chief of Fast Company, and I'll be your host as each episode breaks down what you need to know right now. You can find Rapid Response wherever you get your podcasts.

1:29I'm very much not of the like Hollywood is dead narrative because storytelling is hard and making really great storytelling that transcends is hard still. There's a lot of media that would just love to say, see, everyone hates AI and it's terrible and we shouldn't do it anymore. You know, just like people were pre-boycotting our film before it even existed, right? But the truth is the tools are here and they're being implemented into the way we do things. And that is only going to grow from here.

2:03That's Nick Cleveroff, chief creative officer of Native Foreign and director of Critters, one of the first feature films being built primarily with AI. I spoke with Nick at the Cannes Lions Festival, not to be confused with the Cannes Film Festival, where Critters was initially slated to have its world premiere until OpenAI abruptly shut down Sora, which he'd been relying on. I wanted to speak with Nick about the realities of working with unpredictable new tools like Sora, as well as adopting AI video at scale in an industry that's been publicly hostile and privately tepid about the technology.

2:40Nick breaks down how much AI video has improved from what he calls the stone age of 2022, what its evolution means for the entertainment and advertising worlds, and why human talent is more in demand than ever when it comes to impactful storytelling. Nick also talks about how he reckons with the darker side of deepfakes when it comes to AI videos. And just to note, this conversation wasn't recorded or edited using AI. It's as real as it gets, so let's get to it. I'm Bob Safian, and this is Rapid Response.

3:19I'm Bob Safian. I'm here with Nick Kleveroff, the chief creative officer of Native Foreign and director of the AI animated feature critters. Nick, thanks for being here. Thanks for having me, Bob. Appreciate it. I am low-key obsessed about AI video, not as a practitioner like you, but as an observer. Your film, Critters, was initially slated to premiere to show at Cannes Film Festival this year. Yeah, right about now. Yeah, but got sort of derailed a little bit by technical issues, or was it that the Cannes Film folks, they don't really like AI? Well, interesting you should mention that because the answer is, of course, that the core technology we were building the film with went away in the middle of making the film.

4:07But I do remember when we made the announcement late last fall that, hey, you know, OpenAI is backing our film, so on and so forth. There was almost like a pre-boycott. I was just reading through, you know, there was like French groups and people are like, no, we will not have this. You know, it was like, well, yeah, okay. We were obviously also thinking, you can't guarantee that you're going to play at the Canton Film Festival, right? So it was more of a open AI kind of endeavor that we were embarking on. That you were able to get in there. Yeah, sure. Yeah. But I mean, the initial film idea came from a short that came out of open AI, right?

4:43That's right. So in the stone ages of 2022 of AI video, shortly after Dolly came out, which is open AI's text-to-image platform, we pitched them actually a short film idea. And after we created this kind of world of critters, my partner, Chad Nelson, and I, we kind of pitched them this idea of, okay, well, what if we did a float through of this beautiful forest with all these critters? So you kind of get that tech demo part of it handled. And so it is a bit of a David Attenborough planet Earth, and you're kind of hearing this omniscient narrator talk about this majestic world. But then once we meet the critters and we see them in their natural environment, it becomes a Monty Python sketch, which is, no, you're all wrong.

5:25That's actually not what we're doing here. And it's just really irreverent, silly kind of bickering back and forth between the characters on screen and this voiceover. And that was it. It was a super simple five-minute short. It ended up being much more successful than we had ever imagined. So I think we pitched it in the winter of 22. And then we kind of made it like over holiday break. And then we released it for the one year anniversary of Dolly, which was April of 23. People really liked it and were curious about the process. And remember back then, yes, it was generated with AI, but all the video was traditional.

6:02It was Unreal Engine, it was After Effects, and it was all these kinds of tools that we all know in the industry and use. So really the generative part of it was the creation of these characters and the worlds. And everything else was kind of the way that we do creative. And when you moved to making it a sort of feature length, you started using more generative tools. That's when you started using Sora? Well, yeah. I mean, because if you look at the timeline, in 23, we released it. Sora was announced in spring of 24. So between 23 and 24, actually, the Critters film kind of created a good relationship between Native4 and my company and OpenAI.

6:41And we were doing actually creative work for them, kind of agency work. And then that is when, you know, they were like, hey, we're going to go multimodal. Are you interested in testing this out? So I was playing with Sora before it had a name. And I was one of the initial kind of, they call us the Sora 7, as if we went to the moon, which is silly. But, you know, when they came out in March 24 with that announcement, it was a seven of us that each had kind of made a little short film or something. I decided to take the lane of brand storyteller because that is still the core business of what native foreign does.

7:16And that is where we came from. I luckily met the CMO of Toys R Us at an event and she was like, oh, we're, we're looking at, you know, exploring this new tech. And I was like, well, let's, let's do something together. And so I was able to actually kind of get sign off from both OpenAI and Toys R Us and kind of came together and made the first ever AI commercial, which was for Toys R Us. And that is really when the video started. So if you're thinking timeline, that was only like two years ago and changed. And I mean, Hollywood has been somewhat resistant to anything AI related. Are brands more open to it?

7:54Like they're a little less precious? Does that sort of allow you to use this more? Brands are precious, but I think there is something in advertising that's always been true, which is it's a great place for innovation. You know, you're telling a very targeted story, usually if we're speaking visual language, you know, commercial that's 30, 60 seconds long, you've got a specific product or CTA that you want to kind of talk about. It's a great place for that, you know, and also you can kind of get around some of the limitations of the tech, the Toys R Us piece, it was all text to video. So everything in that Toys R Us spot, I had to type out.

8:30My vocabulary got better. I was trying to, you know, okay, a kid with wireframed round glasses with a blue and white checkered shirt. Very different creative process. It's completely different. You have to be very malleable. You have to kind of roll with the punches a little bit. And then the challenge for us as professional storytellers is how do we maintain that creative control that we've gotten really good at, you know, and brands too. I mean, everybody comes into a commercial knowing exactly what they want. They're looking at the boards and they're looking at the frame. And so how do we kind of figure out that process while also being honest with where the tools are and they're evolving every day, of course, but, you know, from when we started to where we are now, there's been such incredible, incredible progress, but it is kind of funny that you have to roll with the serendipity a little bit more of the process.

9:17when Sora got pulled, which is what sort of slowed your role a little bit with Critters. Like, were you surprised? Did you get early insight on that the same way you got early insight on it coming out? I'd love to say I was that cool, but no, unfortunately, we kind of found out around the time everyone else did. And it was an interesting day because, you know, being in the middle of something, right? And of course, have always been big fans of Open and kind of being tied to that tech was an interesting challenge for us as filmmakers. And I think it's a great case study for where we are in this world, because here we are, you know, kind of pushing one of the first kind of features, especially animated and four quadrant type projects forward.

10:02And then boop, our main technology goes away, right? Or becomes kind of obsolete. Now, granted, they were like keeping the API open for us and everything, but at the same turn, we have to really think about the process and say, okay, well, does it make sense to use something that's not going to be supported, you know, several months down the line? Or do we take some of the calls? Because of course, everyone did call that day. There was plenty of companies that wanted to work on it with us. And we were at the time for that project only doing an exclusive. And so that is kind of where we're at now.

10:33And so we partnered with AGC and we brought the film to Cannes Film Festival, not necessarily to sell it, but actually just to start the conversations. So it's not the full film. It's sort of pieces of the film that you could bring. Pieces of the film that we brought and we're showing. And those pieces were done on Sora or were redone using some of the new other tools? So there was a lot on Sora. And then in the time between March and May, we said, okay, well, let's start rebuilding, doing some new camera. We call them camera tests, even though they're model tests, right? It's like, okay, what does this lens look like?

11:08What does that lens look like? But by lenses, I mean the generative programs. And each one is different. Of course. And the way you use it is different. But you know, the crazy thing is 10 different people can sit down with the same tool and they will wield different results. And so when people talk to me about how humans aren't important anymore, the tools are all the same, it's absolutely untrue. Depending on which creative is at the steering wheel is very, very massively different outputs. Just as having the same camera doesn't end you up with the same film. And look, there's a lot of democratization talk and this and that.

11:45But I will also say everyone's got a camera in their pocket. And how many 13-year-olds are making the next masterpiece film? I mean, there's some truth to yes. There will be undiscovered talent from all over the world. Finally has a shot, is going to do a lot of stuff. But I'm very much not of the Hollywood is dead narrative because storytelling is hard. and making really great storytelling that transcends is hard still. I mean, there are folks in the AI video world who are kind of looked at Critters as like, oh, this is sort of opens the door for us to do other kinds of things. There's pressure in that in some ways for you.

12:22Well, first one through the door gets the spears, you know, being the first to do anything. Yes, you get support, but you also get a lot of angry people. You know, just like people were pre-boycotting our film before it even existed, right? So I do think that we are being watched by everyone. Everyone wants to see how it does. If things don't go well, I think there's a lot of media that would just love to say, see, everyone hates AI and it's terrible and we shouldn't do it anymore. But the truth is the tools are here and they're being implemented into the way we do things. And that is only going to grow from here.

12:59No, I mean, like Toy Story was sort of a seminal moment of a certain kind of technology. And in some ways, Critters is like the standard bearer for this, which you're smiling about, like you like that idea.

13:12Nik Kleverov:But it's a lot. It's a lot. But what I will say, and some of the best things we heard when we were playing it for potential partners at Cannes was, oh, I forgot I was watching AI halfway through. And that's exactly what we want. We just want to tell a really great story and have AI be not even thought of. By most people, I don't want them to even think AI when they're watching. I just want them to watch a great movie. So when you're creating, for folks who aren't doing this, like there's the AI piece of it. There's the human piece of it in the creative as you're talking about it. And then there's sort of the audience reaction to it.

13:52So like, where does the AI start and end? Where does the human start and end? And is it important that the audience know that it was created some with AI or not? I think it depends on who you ask. To me, it's not important. I just want to tell this really great story that wouldn't have been possible to tell before because it just would have cost many hundreds of millions of dollars before. And now we're down to a fraction of that. What UC AI Tool is doing is allowing smaller teams to kind of bat above their weight of really, really great professionals coming together and unifying in a cause. And I think humans are at the forefront of every decision.

14:34There's a human in the loop at every key creative junction. And I don't want anyone to forget that none of this would happen without us. Like there's a whole different narrative going on, which is, Hey, I made a 10 ,000 commercials and, you know, 30 seconds with the click of a button. And that's not the lane I'm playing. And I know that some will. I'm not interested in that. Yeah. I mean, there's lowering the floor and then there's raising the ceiling, right? As you're talking about it, it sounds like you're looking for the projects that you couldn't afford to do or no one maybe could afford to do, right?

15:06Yeah. And Native Foreign started as a brand storytelling, essentially service company, but we fully transitioned into building IP. We are building IP in the age of AI. Critters is one of our flagship products. We have another series that we're doing with one of the modern family writer, producers. And so that's very exciting to me because I was always the filmmaker, the storyteller kid, and I've always wanted to do movies and projects. And, you know, we're finally entering an era where you can. And is there any complications or concerns about the IP, about who owns it or how it's owned when like what you're creating, what you're creating, what the model is creating?

15:45So the original Critter short is one of the first AI shorts to get U.S. copyright. And we did that because we kept a very good track of the human authorship that went into every piece of the design. Tracking while you were doing it? Manually tracking. So saying, okay, here was our first outputs. And then we changed the eyes 20 times and we screen grabbed and tracked that. And then we basically were making our own PDFs and our own documents. And our legal firm really liked that because that is the firepower that they use to go get that copyright. Now, that was all an experiment. And in fact, this whole thing is an experiment.

16:21But now that we have a plan and we got the Paddington writers involved, we're thinking bigger. We've hired some really exceptional character designers, world designers. And so every character now is hand-drawn before it goes to video, before it goes to animation. All the worlds are hand-drawn. So you're creating that IP by hand. Although, I mean, some of those artists may be using digital tools in their work. But where do you draw the line? Because, you know, at some point, you know, Photoshop was considered disruptive, right? So I think where we're at now is an echo of that.

16:58I love listening to Nick talk about his evolving creative process with AI. So why does Hollywood see AI as a moral threat to storytelling? And what happens when the tech gets applied to purposes decidedly less charming than a Critter's movie? We'll talk about that and more after the break. Stay with us.

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18:05Before the break, Director Nick Cleveroff took us inside the creation of the first AI-assisted animated feature. Now he talks about how AI is remaking video production across film and advertising, why 2026 is year zero for mass adoption in Hollywood, and a possible solution for the risk of deepfakes. Let's jump back in. In other realms, AI is looked at as this incredible efficiency area, that things can be done faster. Sure. Does it hit more in pre-production, in production, in post-production, or is that whole sequence different? I've always had the hot take that the editor is the new director.

18:47And so post is really your command and control center of where everything happens. And now in the age of AI, you really are building in the edit. So pre is post and post is pre and production is pre and post. And it all has kind of melded together, even in the instances where you're still going to shoot, which we still do. So many of our things that we do for brands are create a campaign, do basically previs of it, or what we call pre-FX, and then know what we're going to do, know what we're going to go shoot, and then go shoot that thing. The other thing I've really enjoyed is working with really seasoned cinematographers, gaffers, that are also now starting to use the tools and say, hey, Nick, here's how I'm going to light this scene.

19:29Hey, here's what I'm thinking for the composition. I want to do a camera move like this. How do we do it? How do we pull it off? And that's pretty exciting. But it means that in post or when you're editing, if you look and you say, oh, I wish I had shot it this way. You can now. 100%. My entire career, especially as an editor, I was like, oh my God, why didn't the camera people shoot this thing? Or stuff I've directed, I'm like, oh my God, why didn't I get that? I'm so dumb. I should have gotten that. Now you just can't. I mean, I find with other AI that I use sometimes, because it's so easy, seemingly, to get more variation, I can go down a rabbit hole and keep trying to create new things.

20:12So I'm curious how that works for you because you can, oh, let's try this one. What if we did it this way? And that can expand. You have to have restraint. Right. And I think this is where creative direction and a vision comes in really, really critically because you can meander forever. And as the tools have gotten better, the ratio has gotten better. When I was doing Toys R Us, I think I was doing thousand to one ratios. Some shots I literally made a thousand generations of before I got to the one that was decent enough that I still had to finish it out in VFX with. Now we're maybe five to one, 10 to 1, you know, depending on once we establish a really strong key frame of what we're able to do.

20:52So things have gotten much more efficient. But yeah, there's a serendipity and you have to be malleable enough, but you also have to keep it on the rails. And that's an interesting balance. I mean, it's only been a few years that we've had these capabilities in this way. How far along are we? How fast is it changing? Many ways. And you talked about Hollywood Studios earlier. we've been having discussions for a long time, but 2026 really seems kind of like year zero where people are laying the, okay, we're going to try some stuff out now. We're going to like actually move forward and make things happen.

21:29So I think we're just at the beginning. There's been a lot of sorting out that's had to happen and it's go time. I mean, I had a conversation with Chris Fellens-Wayla, I guess, at Runway. Sure. And I was asking him like, what is your planning process for what's next. And he's sort of like, I have, I changed that like every couple of weeks. It just moves so fast, which must make it hard for you when you're working on a project that's going to take longer that you don't know how the tools are going to change. Well, look at what happened with Critters. And we thought that was a sure thing. Luckily, a lot of the projects we've done with AI, you know, the Virgin Voyages work and other pieces is two, three months timeline, right?

22:15So you can kind of lock into a tool and say, okay, we're going to use these set of tools for this period of time. And even if an update happens, we're just going to kind of finish this project and call it wrapped and kind of move on. And you're like the, the SOAR experience didn't make you say like, oh, I, I gotta, I gotta have my own tools. Like I can't use somebody else's. I mean, I know there's so many smart people that are so well-funded making these two, I don't even want to enter that landscape. You know, it's, it's, I think let them do what they're great at and just try to continue forming great partnerships and, you know, lock in.

22:52And, you know, again, we could have finished the film with Soar if we wanted to, but it's a choice now that we're doing to like, okay, because we don't have to, you know, but if I had to, then I would. But you must spend a lot of your time trying to keep up or figure out what's new and what's coming. It's impossible. I'm in all these WhatsApp groups. I'm always getting news pings about this, that, and then the other. And sometimes you're like, oh, this is the tool that we really have needed. And it just got released at the finish of a project. The other thing is, you know, sometimes the demos are a bit deceiving, right?

23:28And you're like, oh, we tried that. It didn't quite work as advertised. but all right, it's a step forward. And what it takes to be expert in using tool A, does that necessarily translate into making you expert at using tool B? Like is each time do you have to learn a new language? That's interesting. If you know how to use AI or you know how to think about AI, you're kind of good. You then just have to start understanding what the different models are all good at and then what your special Witch's Brew is of how you put things together and create your own unique voice. And how do you feel like the world of brand work and AI is the same or different than what's happening in Hollywood?

24:15I mean, I think brands are the first to take chances on some of the AI stuff. They've been quicker to just publicly adopt things and put them out. But I think Hollywood, of course, has to, you know, think really big and think about the future and, you know, all of their relationships with guilds and this and that. So I think it's kind of a whole different world to untangle. I mean, it's interesting, right, that the creative world or what traditionally has been called the creative world is going to learn from the commercial world as opposed to the other way around. That's right. Do you consider yourself an artist, a business person?