Netflix Founder's "Defection" to AI: Do What You Fear

Original Author: David, TechFlow

Netflix has never been this profitable, yet its founder chose this moment to leave.

On April 16, Netflix released its Q1 2026 earnings report, with revenue of $12.25 billion, a 16% year-over-year increase. Net profit surged 83% YoY, and earnings per share reached $1.23, nearly 60% higher than Wall Street's expectation of $0.76.

However, the earnings report also announced another piece of news: co-founder and current Chairman Reed Hastings will not seek re-election after his term ends in June.

Hastings founded Netflix in 1997, building it from a DVD-by-mail service into a streaming giant with over 325 million paid members worldwide—a journey of nearly 30 years. In 2023, he handed over the CEO role to his successor and stepped back to become Chairman. Now, he's leaving that role too.

In its filing with the U.S. Securities and Exchange Commission, Netflix specifically stated: "This decision is not the result of any disagreement with the company."

But the more they emphasize there's no disagreement, the more people wonder what he's really planning to do next.

A little-known fact: in May of last year, Hastings already joined the board of Anthropic. For nearly 30 years, his business has essentially been about getting people to pay for content. While Anthropic's Claude doesn't directly generate videos, it is changing the way content is produced.

From text to images to video, costs are getting lower and speeds are getting faster.

Netflix's profitability relies on good content being worth paying for. If AI lowers the barrier to content creation enough, does that premise still hold?

Hastings is clearly already thinking about this question.

What Is He Afraid Of?

As a top-tier global content producer and distributor, Netflix's founder has always maintained a thoughtful concern about AI.

You might not know that in 1988, Hastings was studying for a master's degree in AI at Stanford. That's right, 40 years ago he was researching artificial intelligence. It's just that the AI of that era was nothing like the useful tool it is today...

In 2022, Hastings was invited as a guest speaker at Stanford University's graduation ceremony.

He later spoke about this himself, his tone almost like he was telling a joke about a youthful misstep. After AI didn't pan out, he turned to a software company and later founded Netflix, which he ran for nearly 30 years.

Someone who studied AI couldn't help but pay attention to the field.

In a 2024 interview discussing AI, he was still quite relaxed: "AI will help us become more creative; we can use these tools to make more shows." Back then, his attitude was one of embrace. AI was a tool, a helper, not a job-stealer.

In March 2025, he donated $50 million to his alma mater, Bowdoin College.

This liberal arts college in Maine doesn't work on large models. Hastings funded a research initiative called "AI and Humanity," specifically studying the impact of AI on work, education, and human relationships.

On the day of the donation, he said something that was completely different from his relaxed tone a year earlier: "We will fight for the survival and flourishing of humanity."

Within a year, AI progressed rapidly, and his stance shifted from AI helping work to AI being a threat to humanity.

Two months later, he joined Anthropic's board.

He was appointed by an independent body called the "Long-Term Benefit Trust," whose five members hold no Anthropic stock. Their sole duty is to ensure AI development aligns with humanity's long-term interests.

In March of this year, he made his position crystal clear in another interview. When the host asked about the biggest risk facing Netflix, he skipped over competitors and subscriber growth and said just two words:

AI.

He said if AI makes the free content on YouTube cool and engaging enough that all the young people flock to watch it for free, then who will pay for Netflix?

From public information, you can find Hastings describing himself as an "extreme techno-optimist." He doesn't think AI itself is bad; the problem lies in the speed gap.

AI technology is advancing too fast, and humanity's moral and institutional frameworks can't keep up.

This explains his seemingly contradictory choices over the past year. He didn't donate to a technical AI lab but to a humanities-focused college. He didn't join the advisory board of any commercial AI company but chose Anthropic's safety committee.

In the author's opinion, Hastings is more qualified than most to be concerned about whether AI will disrupt industries.

Netflix itself was the disruptor of the last cycle. It used streaming to kill DVD rentals, cripple cable TV, and force all of Hollywood to rebuild its distribution system. He personally executed the playbook of "using new technology to drive content and distribution costs low enough to kill the previous winners."

Now, looking at AI, he's probably wondering who's next.

So, Hastings is simultaneously a major shareholder of Netflix and a board member of Anthropic. He holds shares in the company he founded while taking a seat in the industry that might disrupt it.

This might not be called retirement. It's called hedging.

Despite AI's Impact, Netflix Has Never Been Better

Four years ago, Netflix was a company with just over $30 billion in annual revenue and a profit margin of less than 20%, constantly hounded by Wall Street asking, "When will you make real money?" This latest earnings report provides the answer.

In Q1 2026, net profit was $5.28 billion, up 83% YoY. Free cash flow was $5.09 billion, almost double that of the same period last year. Meanwhile, the profit margin reached 32%. The full-year revenue guidance is $50.7 to $51.7 billion. If achieved by year-end, it would mean Netflix's revenue has nearly doubled in three years.

Beyond daily operations, Netflix isn't blind to AI either.

A few weeks ago, it spent up to $600 million to acquire InterPositive, a company that makes AI-assisted film and TV production tools, which can use AI to accelerate script development, scene previews, and post-production. Netflix also specifically mentioned generative AI in its earnings letter, stating its intention to use it to improve content creation and user experience.

Using AI to reduce production costs and improve efficiency is a sound strategy. In fact, the entire Hollywood or content production industry is moving in this direction.

It's just that founder Hastings' concern in the interview might be about a different problem.

In February of this year, ByteDance released its video generation model Seedance 2.0. Upload a photo, and in 60 seconds it generates a 2K video complete with camera movements, sound effects, and lip-syncing.

After testing it, Feng Ji, producer of "Black Myth: Wukong," said four words: "The childhood of AIGC is over." Director Jia Zhangke posted on Weibo saying he was preparing to use it to shoot a short film...

More concrete numbers come from within the industry. According to Securities Times reports, in the e-commerce advertising sector, one person using Seedance 2.0 can complete in 30 minutes what previously took 7 people 3 days to do, reducing costs by over 99%.

From extras in Hengdian to post-production editors and special effects artists, people across the entire industry chain are uttering the same phrase—unemployment anxiety.

Gong Yu, founder of iQiyi, publicly stated a judgment late last year: AI could reduce the cost of the film and television industry by an order of magnitude, increase the number of creators by an order of magnitude, and increase the number of works by two orders of magnitude.

Netflix using AI to reduce production costs is about improving efficiency within the existing model. But what Seedance and similar tools are doing is lowering the barrier to "making a video" from millions of dollars to just a few dollars.

The future Hastings spoke of, where "free content on YouTube becomes good enough," is step by step becoming reality.

Of course, all of this may not be directly related to his current decision to leave Netflix. He began the handover process in 2023, stepping down as CEO, then as Chairman—a transition period of at least three years.

It's just that the timing is indeed微妙. Netflix delivered its best-ever earnings report, and its stock dropped 8% after hours. On the same day, the founder announced his complete departure.

After June, Hastings' name will disappear from Netflix's board roster.

His current titles are Anthropic board member, Bloomberg board member, and owner of a ski resort in Utah. He still holds Netflix stock; Forbes estimates his net worth at $5.8 billion, most of it tied to Netflix.

He's taking Netflix's money and sitting at the AI table.

As for whether this choice is foresight or overcaution, the answer may only come when AI can truly produce a movie that audiences are willing to watch to the end.