Author: David, Schain TechFlow
Netflix has never been more profitable than it is now, yet its founder chose this moment to leave.
On April 16, Netflix released its Q1 2026 earnings report, reporting revenue of $12.25 billion, a 16% year-over-year increase, with net profit up 83% year over year and earnings per share of $1.23, nearly 60% higher than Wall Street’s expected $0.76.
However, the earnings report also announced that co-founder and current chairman Reed Hastings will not seek re-election after his term ends in June.
Hastings founded Netflix in 1997, growing it from a DVD-by-mail service into a global streaming giant with over 325 million paid subscribers, serving in that role for nearly 30 years. In 2023, he stepped down as CEO, handing the position to his successor and becoming chairman. Now, he’s stepping down from that role as well.
Netflix specifically stated in its filing with the U.S. Securities and Exchange Commission: "This decision involves no disagreement with the company."
The more emphasis is placed on there being no disagreement, the more people wonder what he actually plans to do.
A lesser-known fact is that Hastings joined Anthropic’s board in May last year. Having spent nearly 30 years in business, mostly getting people to pay for content, Hastings is now at Anthropic, where Claude—though not directly generating videos—is transforming how content is created.
From text to images to videos, costs are decreasing and speeds are increasing.
Netflix profits because its high-quality content is worth paying for. If AI lowers the barrier to content creation enough, does this premise still hold?
Hastings has clearly already been thinking about this.
What is he afraid of?
As a global leader in content creation and distribution, Netflix’s founder has long had intellectual concerns about AI.
What you may not know is that in 1988, Hastings was pursuing a master’s degree in AI at Stanford. Yes, 40 years ago he was already researching artificial intelligence—though AI back then was nothing like the powerful tool it is today...
In 2022, Hastings was invited as a speaker at the Stanford University commencement ceremony.
He later mentioned it himself, speaking about it as if it were a funny story from his youth gone astray. But since the AI project didn’t work out, he turned to starting a software company, and later founded Netflix, where he’s been ever since—nearly 30 years.
Someone who has studied AI cannot possibly ignore this field.
In 2024, during an interview where he discussed AI, he spoke quite casually: “AI will help us become more creative, allowing us to produce more content using these tools.” At the time, his attitude was one of embrace—AI was a tool meant to assist, not to take away jobs.
In March 2025, he donated $50 million to his alma mater, Bowdoin College.
This liberal arts college in Maine does not work on large models; what Hastings funded them to do is a research initiative called "AI and Humanity," specifically studying the impact of AI on work, education, and interpersonal relationships.
On the day of the donation, he said something entirely different from his lighthearted tone a year earlier: “We will fight for the survival and prosperity of humanity.”
In just one year, AI has advanced rapidly, and his stance has shifted from believing AI can assist with work to viewing AI as a threat to humanity.
Two months later, he joined Anthropic’s board of directors.
The entity that appointed him is an independent organization called the Long-Term Interest Trust, whose five board members hold no shares in Anthropic and have one sole responsibility: to ensure that AI development aligns with humanity’s long-term interests.
In March this year, he said it most clearly on another interview show. When the host asked him what Netflix's biggest risk was, he skipped over competitors and member growth and simply said two words:
AI.
He said that if AI makes free content on YouTube cool and attractive enough that young people all switch to watching it for free, then who would still pay for Netflix?
From publicly available information, you can find that Hastings describes himself as an "extreme technological optimist" and does not believe AI itself is bad—only that the problem lies in the speed gap.
AI technology is advancing too quickly for human moral and institutional systems to keep up.
This explains his seemingly contradictory decisions over the past year: instead of donating to AI labs focused on technology, he donated to a college specializing in the humanities; rather than joining the advisory boards of any commercial AI companies, he joined Anthropic’s Safety Committee.
I believe Hastings is more qualified than most people to be concerned about whether AI will disrupt the industry.
Netflix itself was the disruptor of the last cycle—it killed DVD rentals, severely damaged cable TV, and forced Hollywood to rebuild its entire distribution system. It personally accomplished the feat of using new technology to drive content and distribution costs low enough to eliminate the previous generation of winners.
Now he’s looking at the AI, probably wondering who’s next.
So, Hastings is both a major shareholder of Netflix and a director at Anthropic—holding shares in the company he founded while sitting on the board of a company that could disrupt it.
This might not be called retirement; it's called hedging.
Despite the impact of AI, Netflix has never been better.
Four years ago, Netflix was a company with annual revenue of just over $30 billion and a profit margin of less than 20%, constantly questioned by Wall Street: "When will you start making real money?" This latest earnings report provides the answer.
In the first quarter of 2026, net profit reached $5.28 billion, an 83% year-over-year increase. Free cash flow amounted to $5.09 billion, nearly double that of the same period last year. Meanwhile, the profit margin reached 32%. The full-year revenue guidance is set between $50.7 billion and $51.7 billion; if achieved by year-end, this would mean Netflix’s revenue has nearly doubled over three years.
Beyond daily operations, Netflix has also taken notice of AI.
A few weeks ago, it spent up to $600 million to acquire InterPositive, a company that develops AI-assisted film and television production tools capable of accelerating script development, scene previewing, and post-production. Netflix also specifically mentioned generative AI in its earnings letter, stating that it plans to use it to enhance content creation and user experience.
Using AI to reduce production costs and improve efficiency is a sound approach. In fact, the entire Hollywood and content creation industry is moving in this direction.
What founder Hastings expressed concern about in the interview may not be the same issue.
In February this year, ByteDance released the video generation model Seedance 2.0. Upload a single photo, and within 60 seconds, generate a 2K video with camera movements, sound effects, and lip synchronization.
At the time, after testing it, Feng Ji, the producer of Black Myth: Wukong, said four words: "The childhood of AIGC has ended." Director Jia Zhangke posted on Weibo that he was preparing to use it to shoot a short film...
More specific figures come from within the industry. According to Securities Times, in the e-commerce advertising sector, one person using Seedance 2.0 can accomplish in 30 minutes what previously took seven people three days, reducing costs by over 99%.
Everyone along the production chain in Hengdian—extras, post-production editors, and special effects artists—is talking about the same thing: unemployment anxiety.
At the end of last year, iQIYI founder Gong Yu publicly stated that 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 uses AI to reduce production costs, effectively improving efficiency within its existing model. But companies like Seedance are lowering the barrier to video production from millions of dollars to just a few dollars.
The future Hastings described, where free content on YouTube becomes good enough, is gradually becoming a reality.
Of course, all of this may not be directly related to his current decision to leave Netflix. He began handing over responsibilities in 2023, gradually stepping down from the roles of CEO and Chairman, with at least a three-year transition period.
The timing is indeed delicate. Netflix released its best-ever earnings report, yet its stock dropped 8% after hours. On the same day, the founder announced his complete departure.
After June, Hastings's name will be removed from Netflix's board of directors list.
He currently holds the titles of director at Anthropic and director at Bloomberg, as well as owner of a ski resort in Utah. He still holds Netflix stock, and Forbes estimates his net worth at $5.8 billion, most of which is tied to Netflix.
He’s sitting at the AI table with Netflix’s money.
Whether this choice is visionary or overly cautious may only be answered on the day AI can actually produce a movie audiences are willing to watch in full.