Netflix says it has used visual effects created by generative artificial intelligence (AI) on screen for the first time in one of its original TV shows.

The streaming giant's co-CEO Ted Sarandos said AI, which produces videos and images based on prompts, was used to create a scene of a building collapsing in the Argentine science fiction show, The Eternauts.

He praised the technology as an "incredible opportunity to help creators make films and series better, not just cheaper."

The use of generative AI is controversial in the entertainment industry and has sparked fears that it will replace the work of humans.

The comments came after the company unveiled revenue of $11.08bn (£8.25bn) for the three months to the end of June,16% higher than the same time last year.

Netflix said the better-than-expected performance was boosted by the success of the third and final series of South Korean thriller Squid Game, which has so far attracted 122 million views.

Asked about Netflix's use of AI, Mr Sarandos said the technology has allowed productions with smaller budgets to use advanced visual effects.

The generative AI used in The Eternauts helped its production team to complete a sequence 10 times faster than if they had used traditional special effects tools, he said.

"The cost of it would just wouldn't have been feasible for a show in that budget."

"That sequence actually is the very first [generative] AI final footage to appear on screen in a Netflix original series or film. So the creators were thrilled with the result," said Mr Sarandos.

AI was among the key concerns raised during a Hollywood strike in 2023.

During the three-month walkout, the Screen Actors Guild–American Federation of Television and Radio Artists union called for tighter regulation of the use of AI.