ByteDance's Seedance 2.0 Sparks Hollywood Firestorm Over AI Copyright as Studios Issue Legal Threats

Seedance 2.0, which is currently available only in China, allows users to generate high-quality, realistic AI videos using simple text prompts. Within days of its release, clips began proliferating across social media platforms that appeared to feature copyrighted characters and real actors. Videos reportedly included Star Wars characters Anakin Skywalker and Rey battling with lightsabers, Spider-Man fighting Captain America on the streets of New York, and a widely shared clip of AI-generated versions of Tom Cruise and Brad Pitt fighting in a post-apocalyptic wasteland.

The Motion Picture Association, the trade body representing major Hollywood studios including Netflix, Paramount Skydance, Sony, Universal, Warner Bros. Discovery, and Disney, issued a forceful public statement. "In a single day, the Chinese AI service Seedance 2.0 has engaged in unauthorized use of U.S. copyrighted works on a massive scale," said MPA chairman and CEO Charles Rivkin. "By launching a service that operates without meaningful safeguards against infringement, ByteDance is disregarding well-established copyright law that protects the rights of creators and underpins millions of American jobs."

Disney's cease-and-desist letter, reported by Axios, went further, alleging that ByteDance had "effectively pre-packaged Seedance with a pirated library of copyrighted characters, portraying them as if they were public-domain clip art." Paramount Skydance has reportedly sent a similar legal demand. ByteDance has not disclosed what data was used to train Seedance, a fact that has only intensified suspicion that copyrighted material was incorporated into the model without permission.

The backlash extends well beyond studio boardrooms. SAG-AFTRA, the actors' union that represents roughly 160,000 performers, issued a statement standing "with the studios in condemning the blatant infringement" enabled by Seedance 2.0. The union specifically highlighted the unauthorized use of its members' voices and likenesses. "This is unacceptable and undercuts the ability of human talent to earn a livelihood," SAG-AFTRA said. "Seedance 2.0 disregards law, ethics, industry standards and basic principles of consent. Responsible AI development demands responsibility, and that is nonexistent here."

The anxieties expressed by working creatives have been even more visceral. Screenwriter Rhett Reese, known for the Deadpool franchise, Zombieland, and Now You See Me: Now You Don't, posted on social media after watching the Cruise-Pitt fight video: "I hate to say it. It's likely over for us." He elaborated that "in next to no time, one person is going to be able to sit at a computer and create a movie indistinguishable from what Hollywood now releases. True, if that person is no good, it will suck. But if that person possesses Christopher Nolan's talent and taste (and someone like that will rapidly come along), it will be tremendous."

Reese's comments capture a sense of existential dread that has grown in Hollywood since generative AI tools began producing increasingly sophisticated visual content. The 2023 Hollywood strikes were partly driven by fears about AI replacing human writers and actors, and the rapid advance of tools like Seedance 2.0 suggests those fears were not unfounded.

ByteDance's response has been notably restrained. The company told the BBC on Monday that it "respects intellectual property rights and we have heard the concerns regarding Seedance 2.0," adding that it is "taking steps to strengthen current safeguards as we work to prevent the unauthorized use of intellectual property and likeness by users." The company declined to answer questions about what specific safeguards it plans to implement or when they would take effect.

ByteDance had previously stated that Seedance had already paused the ability for users to upload images of real people, a measure that appears to have done little to prevent the creation of clips featuring recognizable actors and characters. The core issue, critics argue, is not merely what users can upload but what the AI model has already learned from its training data — data that ByteDance has not made public.

The situation also has an international dimension. Japan's government has launched an investigation into ByteDance over potential copyright violations, after AI-generated videos of popular Japanese anime characters created with Seedance surfaced online. This adds another front to a legal battle that could force ByteDance to contend with multiple jurisdictions' intellectual property frameworks simultaneously.

The Seedance dispute highlights a notable tension within the entertainment industry's approach to AI. While studios are aggressively pursuing ByteDance for unauthorized use of their content, several have simultaneously embraced licensing arrangements with other AI firms. Disney announced a $1 billion equity investment in OpenAI last year, along with a three-year licensing agreement that gives OpenAI's Sora video generation tool access to roughly 200 Disney characters from franchises including Marvel, Star Wars, and Pixar.

This dual strategy — litigation against unauthorized use paired with monetization through licensed partnerships — suggests that Hollywood is not opposed to AI per se, but rather to AI that does not compensate rights holders. The distinction is significant: it positions major studios not as Luddites resisting technological change, but as businesses seeking to control and profit from how their intellectual property is used in the AI era.

However, this approach creates its own complications. Smaller creators, independent filmmakers, and individual artists often lack the bargaining power to negotiate licensing agreements with AI companies. The emerging framework may benefit large intellectual property holders while leaving independent creators vulnerable. The ongoing lawsuit between Disney and NBCUniversal against AI image generator Midjourney, which accuses the platform of producing "endless unauthorized copies" of copyrighted works, will likely set important precedents for how these boundaries are drawn.

The Seedance controversy arrives at a moment when AI-generated content is advancing at a pace that has surprised even industry insiders. The first version of Seedance launched just eight months ago, in June 2025, and the leap in quality between that iteration and Seedance 2.0 has been dramatic enough to alarm even seasoned professionals like Reese. If similar progress continues, the technology's impact on film, television, and advertising could be transformative — and deeply disruptive.

The legal landscape remains unsettled. Copyright law in most jurisdictions was written long before AI models existed, and courts are still grappling with fundamental questions: Does training an AI model on copyrighted material constitute infringement? Can an AI-generated image of Spider-Man violate Disney's trademark even if no human artist copied the design? When a user prompts an AI to create a video of Tom Cruise, who bears legal responsibility — the user, the platform, or the model's creators?

These questions are not academic. The answers will determine how billions of dollars in creative industry revenue are allocated in the years ahead, and whether AI becomes a tool that augments human creativity or one that renders significant portions of the creative workforce obsolete. For now, ByteDance's pledge to add safeguards represents a tactical retreat, but the underlying technological capabilities are not going away. The genie, as Hollywood is painfully discovering, does not go back in the bottle.