Strauss Zelnick, the CEO of video game publisher Take-Two Interactive, said he is not a “naysayer” when it comes to the promise of artificial intelligence. But at the same time, Zelnick, who leads the company that publishes the “Grand Theft Auto,” “NBA 2K,” “Red Dead” and “Borderlands” video game series, said the signs that the technology is having an impact on game development and production are “still limited.”

That’s for two reasons, Zelnick told a room of technology executives at CNBC’s Technology Executive Council Summit in New York on Tuesday.

The first reason — which is increasingly placing AI companies at odds with Hollywood, musicians and other creative industries — is intellectual property.

“We have to protect our intellectual property, but more than that, we have to be mindful of others,” Strauss told CNBC’s Steve Kovach in an interview at the CNBC event. “If you create intellectual property with AI, it’s not protectable.”

The data-rights clash between content owners and the AI industry has resulted in a string of licensing deals, lawsuits and ongoing criticism as AI companies continue to seek out more data sets to train their large language models.

However, the debate took another twist upon the release of OpenAI’s video creation app Sora last month, which allows users to generate near-realistic, short-form AI videos through prompts. That has opened the door for a new set of concerns around deepfakes and the usage of the voice and likenesses of not only famous actors, musicians and animated characters, but also any person.

Strauss said that when it comes to AI usage at game publishers like Take-Two, it’s not only important that the created content stands up to copyright laws but also protects people’s rights. “There are constraints,” he said.

But perhaps the bigger hurdle when it comes to utilizing more AI in game production is one at the center of what he believes is why the company continues to be successful.

“Let’s say there were no constraints [on AI]. Could we push a button tomorrow and create an equivalent to the ‘Grand Theft Auto’ marketing plan?” he said. “The answer is no. A, you can’t do that yet, and B, I am of the view that you wouldn’t end up with anything very good. You end up with something pretty derivative.”

Strauss said that is due to AI inherently being “backward looking” because its computation is tied to big data sets of old information.

Often, he said, what AI produces can feel new because it’s using predictive models, “and there are many, many, many things in life that are predictable based on data,” and there are plenty of things that data can solve for.

While that may help with solving something as complex as a cure for a disease or as simple as biology homework, Strauss said that when it comes to creating the sorts of multi-layered universes that Take-Two’s video games have become known for, it’s another story.

“Anything that involves backward-looking data compute, it’s really good for that and that applies to lots of things,” he said. “What we do at Take-Two, anything that isn’t attached to that, it’s going to be really, really bad at.”

Maintaining that creative edge has been critical for Take-Two, one of the last standing public video game developers after Microsoft acquired Activision Blizzard for $69 billion in 2023 and Electronic Arts announced last month that it will be acquired by the Public Investment Fund of Saudi Arabia, Silver Lake and Affinity Partners in an all-cash deal worth $55 billion.

“We aim to create franchises that are permanent,” Strauss said, noting that Take-Two has 11 franchises that have sold at least five million games upon release, in addition to more than 20 popular mobile games.

The company’s biggest franchise, “Grand Theft Auto,” is set to launch its next iteration in May 2026 and will likely set new sales records. Strauss said that the previous game in the series, “Grand Theft Auto V,” had $1 billion in sales in the first three days of its launch in 2013.

“The team’s creativity is extraordinary, and what [Take-Two subsidiary] Rockstar Games tries to do, and so far has done over and over again, is create something that approaches perfection,” he said. “There is no creativity that can exist by definition in any AI model, because it is data-driven,” Strauss added.

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