Just when you thought the holiday season couldn’t arrive any earlier this year, here comes an AI-generated Christmas movie.
Titled “Merry the Christmas Witch,” it’s based on a children’s book and will inspire awe in its young audience about the magic of the holidays — through ghoulish and uncanny AI imagery (you can see footage here). The film — which currently has no distributor — cost $1.5 million to make, but its director brags that using AI actually saved him tens of millions of dollars.
“We would never have gotten a movie like ‘Merry’ made if we didn’t take that chance,” Tom Walsh, CEO of the indeopendent production company TW3 Entertainment, and who directed and co-wrote the film, told Variety.
According to Walsh, when he was inspired to make a movie out of author Bobbi Hess’s original book, he realized that it would cost $80 million to make. An “unknown property” like this one would be a hard sell to studios, he explained.
“We were kind of stuck,” Walsh told Varietey. “The doors are not very open to new kind[s] of ideas and new kind[s] of stories and everything, and that makes it a little tough for independent filmmakers, so that’s where AI came in.”
You can sympathize with his position. A movie industry obsessed with intellectual property and averse to risk-taking has made it harder than ever for independent creatives to fund their projects and reach an audience.
Still, many filmmakers dedicated to the art form figure out a way to do it, and by and large, they’re not relying on AI to generate their movies wholesale. This year’s breakout hit “Obsession,” for example, made half a billion dollars on a budget of less than a million with an original story, becoming even more profitable than the 1999 found-footage sensation “The Blair Witch Project.”
I need someone to tell me with a straight face that they’d sit in a theater to watch this pic.twitter.com/BbpJfHXSe6
— Nuñez (@guycen) October 13, 2026
In all, roughly 50 people worked on “Merry the Christmas Witch” for 10 months in what Walsh described as a “hybrid AI production.” But really, it sounds like it was mostly AI. Walsh hired human actors to record the script and help guide how the characters moved and sounded. In the end, though, he decided to replace their performances with AI-generated voices using ElevenLab’s AI voice synthesizer, alongside video generators like Seedance and Nanobanana for the imagery.
The human element, he insists, was still important.
“The quality of your AI production depends on the quality of your traditional production staff,” he told Variety. “If you have inexperienced people who don’t know production…and timing and how shots should look, it’s going to look like garbage.”
Of course, relying on AI probably did save him millions of dollars. But the end result is that the million and a half he did put in was to churn out obvious slop.
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