Written by: David

Netflix has never been as profitable as it is now, yet the founder chose this time to leave.

On April 16, Netflix released its first-quarter financial report for 2026, with revenues of $12.25 billion, a year-on-year increase of 16%, and net profits rising 83% year-on-year, with earnings per share of $1.23, nearly 60% higher than Wall Street's expectation of $0.76.

But the financial report simultaneously announced another matter: co-founder and current chairman Reed Hastings will not seek re-election after his term ends in June.

Hastings founded Netflix in 1997, starting from DVD rental to become a streaming giant with over 325 million paid members worldwide, working for nearly 30 years. In 2023, he handed the CEO role to his successor and stepped back to chairman. Now, even the chairmanship will be left behind.

In the documents submitted to the U.S. Securities and Exchange Commission, Netflix specifically stated: "This decision is not due to any disagreement with the company."

However, the more it emphasizes that there is no disagreement, the more it makes people wonder what he is actually going to do.

A little-known fact is that last May, Hastings joined the board of Anthropic. He has been in business for almost 30 years, primarily focused on getting people to pay for content, whereas Anthropic's Claude, although it doesn't directly generate videos, is changing the way content is produced.

From text to images to video, the costs are decreasing, while the speed is increasing.

Netflix remains profitable because good content is worth paying for. If AI lowers the production threshold for content enough, does this premise still hold?

Hastings is clearly already thinking about this issue.

What is he afraid of?

As a top global content producer and distributor, Netflix's founder has always had a mental concern regarding AI.

You may not know that in 1988, Hastings studied for a master's degree in AI at Stanford. That's right, he was researching artificial intelligence 40 years ago. But AI back then was nothing like it is today...

At Stanford's graduation ceremony in 2022, Hastings was invited as a speaker.

He later mentioned this matter himself, speaking as if telling a joke about wrong paths taken in youth. It's just that since AI didn't pan out, he turned to software companies and later founded Netflix, continuing for nearly 30 years.

A person who has studied AI cannot help but pay attention to this field.

In 2024, he was interviewed and spoke about AI in a relaxed manner: "AI will help us become more creative, and we can use these tools to create more programs." At that time, his attitude was one of embrace. AI was a tool, meant to assist, not to take jobs away.

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

This liberal arts college in Maine does not focus on large models. Hastings provided funds for a research project called "AI and Humanity," specifically studying the impact of AI on work, education, and interpersonal relationships.

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

In just one year, the rapid progress of AI has shifted his stance from viewing AI as helpful to seeing it as a threat to humanity.

Two months later, he joined the board of Anthropic.

He was appointed by an independent body called the "Long-Term Benefit Trust," whose five members do not hold any shares in Anthropic and have only one responsibility: to ensure that AI development aligns with the long-term interests of humanity.

In March of this year, he made his concerns clear during another interview. When asked what the biggest risk facing Netflix was, he bypassed competitors and subscriber growth, directly stating two words:

AI.

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

From public information, you can find Hastings himself calling himself an "extreme technological optimist." He doesn’t think AI itself is a bad thing; the issue lies in the speed of its advancement.

AI technology is advancing too quickly, while humanity's moral and institutional systems cannot keep up.

This explains some of his seemingly contradictory choices over the past year. He doesn’t donate to technical AI labs but donates to a humanities research college; he joined a board without choosing an advisory team from any commercial AI company but opted for Anthropic’s safety committee.

I believe Hastings is more qualified than most to be concerned about whether AI will disrupt the industry.

Netflix itself was a disruptor in the previous round, using streaming to kill DVD rentals, severely impacting cable TV, and forcing Hollywood to reconstruct its distribution system. He has personally experienced once "lowering costs of content production and distribution enough through new technology to eliminate the previous generation of winners."

Now, as he looks at AI, he is probably wondering who will be next this time.

Thus, Hastings is both a major shareholder of Netflix and a board member of Anthropic. He holds shares in the company he founded while sitting at the table of an industry that may disrupt his own company.

This may not be called retirement, but a hedge.

Although AI is impacting, Netflix has never been better

Four years ago, Netflix was still a company with annual revenues just over $30 billion and a profit margin of less than 20%, being chased by Wall Street with the question "When will you start making real money?" The financial report four years later provided an answer.

In the first quarter of 2026, net profits reached $5.28 billion, an 83% increase year-on-year. Free cash flow was $5.09 billion, almost double that of the same period last year. At the same time, the profit margin has climbed to 32%. The full-year revenue guidance is between $50.7 billion and $51.7 billion. If it achieves that by the end of the year, it means that in three years, Netflix's revenue has nearly doubled.

Outside of daily operations, Netflix is also not blind to AI.

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

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

However, the concerns expressed by founder Hastings in interviews may not be addressing the same issue.

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

At that time, the producer of "Black Myth: Wukong," Feng Ji, said four words after testing it: "The childhood era of AIGC is over." Director Jia Zhangke tweeted that he plans to use it to shoot a short film...

More specific numbers come from within the industry. According to reports from the Securities Times, in the e-commerce广告领域, an individual can complete the work of seven people over three days in just 30 minutes using Seedance 2.0, with a cost reduction exceeding 99%.

In Hengdian, the extra actors, post-production editing, and special effects production are all expressing the same term—job anxiety.

The founder of iQIYI, Gong Yu, openly stated a judgment at the end of last year: AI could lower the film and television industry's costs 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's use of AI to reduce production costs equates to improving efficiency within the existing model. However, platforms like Seedance are lowering the barrier for producing videos from several million dollars to just a few dollars.

The future that Hastings mentioned, where "free content on YouTube becomes good enough," is gradually becoming a reality.

Of course, all of this may not have a direct relationship with his current choice to leave Netflix. He began the handover process in 2023, stepping back step by step from CEO to chairman, with at least a three-year transition period.

However, the timing is indeed subtle. Netflix presented its best financial report in history, yet its stock fell 8% after hours. On the same day, the founder announced his complete departure.

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

His current titles include director at Anthropic, director at Bloomberg, and owner of a ski resort in Utah. He still holds Netflix stock, and according to Forbes, has a fortune of $5.8 billion, much of which is tied to Netflix.

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

As to whether this choice is visionary or overly cautious, it may take until AI can produce a movie that audiences are willing to watch to find out.

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