The future of animation work in the AI era is beginning to take shape.

Following a high-stakes negotiation that stalled due to a fierce battle over the burgeoning technology, the Animation Guild has reached a tentative deal with studios and streamers over a new three-year contract for members in the L.A. area.

The deal was reached on Friday, according to the union. The provisional deal includes AI language that includes notification and consultation provisions, according to the union. The deal also allows a 7 percent general wage increase in the first year of the contract, a 4 percent wage increase in the second year and 3.5 bump in the third and language that allows for remote work. The Hollywood Reporter has reached out to the Alliance of Motion Picture and Television Producers for comment.

Guild negotiators have been clear that, from their point of view, these contract negotiations were primarily a fight over AI. In a survey of media leaders that was released in January, an economic consulting firm commissioned by the Animation Guild found that 29 percent of animation jobs could potentially be disrupted by AI within the next three years alone. In a separate report, released days before the union resumed contract negotiations, a union task force argued that entry-level positions will be most at risk of displacement in the next few years even as AI applications and programs can target most of the job categories of TAG members.

The union, which represents more than 5,000 animation workers in collective bargaining, entered negotiations with the Alliance of Motion Picture and Television Producers on August 12. Besides the top issue for the union for the union instituting guardrails on generative AI the labor group also sought to fight the outsourcing of work originating at L.A.-area studios to other countries.

In a union rally in Burbank on August 10, union leaders argued that this round of negotiations will set the tone for animation for years to come. This really, for us, feels like a do-or-die negotiation cycle, negotiating committee member and writer Joey Clift said.

Added writer Julie Prescott, The American animation industry is at stake and the drawing kid from your childhood is not going down without a fight.

In recent weeks, the labor group has taken the fight to the doorsteps of major companies, demonstrating at the offices of Netflix, DreamWorks Animation and Warner Bros. Animation. While there, workers delivered a petition citing recent financial struggles for animation workers and calling for a fair deal with livable wages and job security.

More to come.