Written by: David
Netflix has never been more profitable, yet its founder chose this moment to leave.
On April 16, Netflix released its Q1 2026 financial report, with revenue of $12.25 billion, a year-on-year increase of 16%, net profit up 83% year-on-year, and earnings per share of $1.23, nearly 60% higher than Wall Street's expectation of $0.76.
However, the financial report also announced another thing: co-founder and current chairman Reed Hastings will not seek re-election after his term expires in June.
Hastings founded Netflix in 1997, building it from a DVD mail-order business into a streaming giant with over 325 million paid subscribers worldwide, a feat he accomplished in nearly 30 years. In 2023, he handed over the CEO role to his successor, stepping down to chairman. Now, he's even relinquishing his chairmanship.
In its filing with the U.S. Securities and Exchange Commission, Netflix specifically stated, "This decision is not at odds with the company."
But the more he emphasizes the lack of disagreement, the more people wonder what he's really up to.
A little-known fact is that Hastings joined Anthropic's board of directors last May. He's been in business for almost 30 years, primarily focused on getting people to pay for content, while Anthropic's Claude, though not directly generating videos, is changing the way content is produced.
From text to images to videos, costs are decreasing and speeds are increasing.
Netflix is profitable because its high-quality content is worth paying for. If AI lowers the barrier to content creation low enough, will this premise still hold true?
Hastings is clearly already thinking about this issue.
What is he afraid of?
As a top global content producer and distributor, Netflix's founders have always had a deep-seated concern about AI.
What you might not know is that Hastings was pursuing a Master's degree in AI at Stanford in 1988. That's right, he was researching artificial intelligence 40 years ago. It's just that AI back then wasn't nearly as useful as it is today...
Hastings was invited to be a speaker at Stanford University's 2022 commencement ceremony.
He later recounted this story himself, speaking as if it were a joke about a young man who took the wrong path. However, his AI venture didn't succeed, so he turned to software companies, eventually founding Netflix, which he has run for nearly 30 years.
Anyone who has studied AI cannot help but pay attention to this field.
In a 2024 interview, he talked about AI, and he seemed quite relaxed at the time: "AI will help us become more creative, and we can use these tools to make more programs." At that time, his attitude was to embrace it. AI is a tool, meant to help, not to steal our jobs.
In March 2025, he donated $50 million to his alma mater, Bowdoin College.
This liberal arts college in Maine doesn't do large-scale models; Hastings funded them to do a research program called "AI and Humanity," which specifically studies the impact of AI on work, education, and interpersonal relationships.
On the day of the donation, he said something completely different from his relaxed tone a year earlier: "We will fight for the survival and prosperity of humanity."
Within a year, AI has made rapid progress, and his stance has changed from AI helping with work to AI being a threat to humanity.
Two months later, he joined Anthropic's board of directors.
He was appointed by an independent body called the Long-Term Interest Trust. None of the five members hold any shares in Anthropic, and their sole responsibility is to ensure that the development of AI aligns with the long-term interests of humanity.
In March of this year, he spoke very frankly in another interview. When the host asked him what the biggest risk facing Netflix was, he skipped over competitors and membership 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 go to watch free content, then who will pay for Netflix?
From publicly available information, you can find that Hastings describes himself as an "extreme tech optimist" who doesn't think AI itself is a bad thing, but rather that the problem lies in its speed.
AI technology is advancing too fast, and human moral and institutional systems cannot keep up.
This explains his seemingly contradictory choices over the past year: donating money to a humanities college instead of a tech-focused AI lab; choosing Anthropic's security committee instead of an advisory board for any commercial AI company.
In my opinion, 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 wave. It killed DVD rentals with streaming, crippled cable television, and forced Hollywood to rebuild its distribution system. It personally did something like "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.
Therefore, Hastings is both a major shareholder of Netflix and a director of Anthropic. He's taking shares in the company he founded and sitting down in an industry that could potentially disrupt it.
This might not be called retirement, it's called hedging.
Despite the impact of AI, Netflix has never actually been this good.
Four years ago, Netflix was a company with annual revenue of just over $30 billion and a profit margin of less than 20%, constantly being asked by Wall Street, "When will you be able to make real money?" This financial report four years later provides the answer.
In the first quarter of 2026, net profit reached $5.28 billion, an 83% year-over-year increase. Free cash flow was $5.09 billion, almost double that of the same period last year. Meanwhile, the profit margin reached 32%. Full-year revenue guidance is $50.7 billion to $51.7 billion. If this is achieved by the end of the year, it would mean that Netflix's revenue has nearly doubled in three years.
Beyond its daily operations, Netflix has also noticed the potential of AI.
A few weeks ago, Netflix acquired InterPositive, an AI-assisted film and television production tool, for up to $600 million. InterPositive can use AI to accelerate script development, scene previews, and post-production. Netflix also specifically mentioned generative AI in its earnings letter, saying it will use it to improve content production and user experience.
Using AI to reduce production costs and improve efficiency is a sound idea. In fact, the entire Hollywood and content production industry is moving in this direction.
However, the concern that founder Hastings expressed in the interview may not be the same issue.
In February of this year, ByteDance released Seedance 2.0, a video generation model. Upload a photo, and it generates a 2K video with camera movement, sound effects, and lip-sync within 60 seconds.
After testing it, Feng Ji, the producer of *Black Myth: Wukong*, said four words: "AIGC's childhood is over." Director Jia Zhangke posted on Weibo that he planned to use it to make a short film...
More specific figures come from within the industry. According to the 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, resulting in a cost reduction of over 99%.
In Hengdian, everyone in the industry chain—from extras and post-production editors to special effects artists—is talking about the same word: unemployment anxiety.
Gong Yu, the founder of iQiyi, publicly stated at the end of last year 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, which is equivalent to improving efficiency within the existing model. But what Seedance and others are doing is lowering the barrier to entry for "making video" from millions of dollars to just a few dollars.
Hastings' vision of a future 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 decision to leave Netflix. He began handing over the reins in 2023, stepping down as CEO and chairman, with a transition period of at least three years.
The timing was indeed delicate. Netflix delivered its best earnings report in history, and its stock fell 8% in after-hours trading. On the same day, the founder announced his complete departure from the company.
After June, Hastings' name will disappear from Netflix's board of directors.
His current titles include director of Anthropic, director of Bloomberg, and owner of a ski resort in Utah. He still holds Netflix stock, and according to Forbes, his net worth is estimated at $5.8 billion, most of which is tied to Netflix.
He's taking Netflix's money and sitting at AI's table.
Whether this choice is visionary or overthinking remains to be seen until AI can actually produce a movie that audiences are willing to watch.
