When Dreams Caught Fire: A Forensic Examination of Hollywood's Burning Hour
Decoding Lynch's hidden prophecy: Why "Mulholland Drive" was really about the arrival of AI
Celebrating 100 subscribers: As I explore the economics of recognition in this essay, I'm mindful that each of you represents someone who values deep thinking about cinema, storytelling and creativity. To maintain this quality of discourse as we grow, I'm gathering a small group of our most engaged readers for an intimate discussion about the future of cinema and visual storytelling in an age of AI. Details at the end.
Prologue
I watch from my window as the fire advances across our iconic hills, each frame burning itself into memory like one of my many unproduced scripts. Fifteen years in this industry, and now the inferno consuming our creative landscape feels like nature's own final draft—a spectacle we cannot look away from, a disaster we cannot reshoot. If we evacuate, when we evacuate, how many of these sheets will I shuffle into a pile and take with me? Will I have use for them where I will go? These flames upon us mirror something deeper: the algorithmic forces now encroaching upon our creative bread, the ones they said would "assist" but yet might replace us entirely. Another kind of fire, moving faster than we can process or understand. Three months since the last rejection. Over a year since the strike ended. How many pages written since? How many dreams deferred?
Yesterday brought news of David Lynch's passing. The timing feels scripted, as though reality itself has developed a taste for metaphor. Lynch, who understood better than anyone the thin membrane between dreams and waking life, leaves us just as we need his cipher most urgently. His absence creates a negative space through which we might examine what lies beneath this rude awakening.
I find myself approaching these events like one of his scenes—studying each detail, each coincidence, with forensic attention. I cannot help myself. An occupational hazard in this very moment. The evidence accumulates: the fire, the fear, the future rushing toward us faster than we can imagine it. Something is ending. Or beginning. Perhaps both.
The cursor blinks on my screen. Another draft, another futile attempt to capture something true before it all changes. Before the machines learn to tell our stories better than we can. Before this cherished view from my desk becomes someone else's establishing shot, set in a future I cannot picture. The smoke is thicker now. Have to evacuate, but need to finish this first. Need to get it all down, before IT beats me to it. Need to hold the present steady, even if for only a moment, before it all becomes too hazy to lean on.
A writer without a script
-Los Angeles, January 23, 2025
Begin by setting the room, dimming the lights or drawing the blinds.
This is best read in a darkened space, or fading light.
Now señoras y señores, you are ready to dream.
In moments of profound transformation, coincidences take on the weight of evidence. The Palisades fire, Lynch's passing, the threat of AI and its impact on the industry —these events converge like clues in one of David Lynch’s films, demanding we play detective to their deeper significance. As we sift through the ashes of old paradigms, it is in our duty of care to connect the pieces left behind, conducting an autopsy on Hollywood's dream life, with Lynch's legacy providing the forensic framework for our examination. If we are to properly examine what lies beneath the ash, we must approach the debris with the precision of pathologists, cataloging the evidence before us as we navigate this liminal space between what was and what awaits.
ACT I. A Prophecy Written in Smoke
Mulholland Drive stands as one of cinema's most devastating meditations on unredeemable failure, its power lying not in what it shows us directly, but in the careful excavation of truth beneath our cherished illusions. Through its presentation of the ideal, it quietly sculpts a shadow narrative that, once revealed, renders the preceding dream sequence horrifying in its implications. We're left with the emptiness of wishful thinking, pure make believe, and utter abandonment of the dream. We abandon Betty Elms the protoganist completely, unable to empathize nor forgive her, yet unsure if we can blame Diane Selwyn the antagonist (both played by Naomi Watts) for misleading us. Who is really to blame? A mere once wide-eyed newcomer to town, now so fallen from grace, disenchanted by the realities of the business? Or is the dream-machine itself to blame, the medieval hierarchies supressing true talent, the power hungry puppetmasters at the top of the food chain? Or, perhaps hardest to swallow - is the cinematic medium itself deceitful? With its director masterfully weaving its ingredients to lead us so deep into its underbelly, that by the time we’ve realized the trap, the door has already closed behind us. In here, chewing on the morsels of narrative we’ve been fed, we must first digest the darkness of failure without redemption, to come out on the other side and into the light.
The film’s final act achieves something so uniquely chilling: a betrayal not just of narrative trust, but of our own willingness to be deceived. In David Lynch’s masterful hands, the mechanisms of our own easy surrender to illusion are exposed, while we marvel at the power of the medium to manipulate our trust. In doing so, he elevates Mulholland Drive far beyond mere critique—becoming both thesis and antithesis of Hollywood's dream factory, simultaneously embodying and deconstructing the industry's power to shape reality, both its light and shadow.
As smoke continues to rise from the hills, this duality takes on new urgency. Just as Lynch's film strips away our comfortable illusions with surgical precision, the current technological disruption of AI demands that we examine which of our cherished beliefs about creativity, authenticity, and human expression might be mere projections—dreams we told ourselves to make the machinery of entertainment more palatable. Like Naomi’s character, we must eventually wake up from the drug-induced dream, and perhaps even confront the horror which the fires have made visceral for us - a wild opera of a final act that only Hollywood itself could afford to pay for, with an opportunity for atonement and catharsis printed on the receipt. A larger than life production that could one day be remembered as the turning point that evolved and rebuilt our collective dream factory.
Club Silencio scene from Mulholland Drive (2001): Rebekah Del Rio performs "Llorando" while Naomi Watts and Laura Harring experience an unexpected moment of pure emotion, transcending their mission to solve a mystery. Even after being told "there is no band... it is all an illusion," they find themselves moved to tears by what feels paradoxically real and unreal at once - a key to understanding Lynch's exploration of authentic feeling in an artificial world.
Mulholland Drive's Club Silencio sequence takes on prophetic resonance in our age of artificial creation. "No hay banda... It is all recorded... It is all a tape... It is an illusion," the performer insists, even as we feel the raw power of performance. This paradox—that artificial reproduction can produce genuine emotion, that knowing something is "fake" doesn't negate its emotional truth—speaks directly to our AI moment. When an algorithm generates art that moves us to tears, are those tears any less real?
Yet the deeper truth revealed in Club Silencio isn't about the nature of performance but about the nature of witness. As the magician proclaims everything is artificial, we watch Betty and Rita watching, their tears real, their recognition authentic. Lynch reveals the essential alchemy of art: it requires both performer and witness, seen and seer, each transforming the other through the act of recognition. The performance may be "recorded," but the recognition between souls is always live, always real, always transformative.
This sacred dance of mutual recognition lies at the heart of both Lynch's cinema and the magical in Hollywood's dream machine. Consider Lynch's own first encounter with Naomi Watts, a moment that would transform both artist and performer through the simple act of truly seeing and being seen.
At the core of Mulholland Drive lies a profound meditation on visibility and recognition, one that its star lived before a single frame was shot. For a decade, Naomi Watts endured the purgatory of failed auditions—that endless cycle of being seen but not truly recognized—until a moment that would transform both her life and her knowledge of herself.
The story has become industry legend: David Lynch, rather than subjecting Watts to another traditional audition, simply asked her to tell him about herself. No sides to read, no character to inhabit—just an invitation to be present, to be seen. This request, in its radical simplicity, represented something ancient and sacred: the alchemical moment when raw potential meets the catalyst of genuine recognition. What transpired wasn't the usual transaction of Hollywood power, but something rarer—a pure screen romance, between creator and muse. Not sexual, not codependent, not exploitative, but unconditional, as transformative as a mother's love. Through Lynch's act of seeing, Watts transformed from an aspiring actress composed of ephemeral dreams into an embodied artistic force, a known quantity of measurable value in the public eye.
This moment represents the classical Hollywood hero's journey in its purest form: the story of being seen, being chosen, becoming known. It's a fundamental relationship that reaches back to antiquity, when mortals and divine beings entered into a sacred dance of mutual recognition. When Apollo's gaze fell upon Daphne, when the Muse joined with her poet, this recognition wasn't mere observation but metamorphosis—a moment when both mortal and divine were transformed through their encounter.
This profound dance of mutual recognition echoes across human wisdom traditions. In Zen Buddhism, the concept of "transmission" between master and student isn't simply a one-way bestowing of knowledge, but a moment of mutual illumination where both parties are transformed. Among the Australian Aboriginal peoples, the concept of "dadirri" describes a deep, mutual listening between person and land, where both listener and listened-to are changed through the encounter. The Jewish mystical tradition speaks of "tzimtzum," where God had to contract or withdraw to make space for human consciousness—a divine self-limitation suggesting that even the ultimate creative force requires relationship and recognition to achieve full expression.
The risk of failure haunts every authentic act of recognition.
Lynch could have been wrong about Watts. She could have failed to embody his vision. This very possibility of failure—this leap into uncertain territory—gives human recognition its profound weight and meaning. When we truly see another person, we stake something of ourselves on that recognition. We risk being wrong, being hurt, being transformed against our will.
Even quantum physics offers a metaphor for this phenomenon through the observer effect—the recognition that the very act of observation changes both the observer and the observed. This isn't just a physical principle but a profound truth about consciousness itself: true seeing is always mutual, always transformative. Contemporary neuroscience reinforces this through studies of mirror neurons and interpersonal neurobiology. When we truly recognize another, our neural patterns synchronize and transform each other. The brain itself is changed through authentic recognition.
But what happens when the eye that beholds us becomes binary rather than human? When artificial intelligence systems scan millions of faces, voices, and performances, reducing the sacred act of recognition to a calculus of patterns? The transformation from being seen to becoming known once required a human encounter - flawed, perhaps, often problematic, but fundamentally alive. Now these encounters become digital transactions, processing human potential through neural networks rather than through the complex, messy, vital network of human relationship.
“The real problem of humanity is the following: We have Paleolithic emotions, medieval institutions and godlike technology.”
- Edward O. Wilson, widely considered one of the greatest natural scientists of our time, a pioneer in efforts to preserve and protect the biodiversity of our planet.
As Wilson warns, our Paleolithic emotions now confront godlike technology. Our primordial need to be truly seen - as ancient as consciousness itself - now faces artificial systems capable of "seeing" us with superhuman accuracy but perhaps blind to the very humanity they observe. The algorithm may map every contour of our performance, but can it participate in that alchemical moment of mutual discovery that transformed both Watts and Lynch? Can code recognize the ineffable spark that jumps between two conscious beings in moments of true recognition? When Pygmalion prayed to Aphrodite to bring his statue to life, both sculptor and stone were transformed by their encounter - a miracle of mutual becoming. When AI generates endless variations of form and performance without sacrifice, it operates in a vacuum of consciousness, producing without participating, seeing without being changed by what it sees. As we drift further from the old continent of myths and memories, we risk losing not just the traditional pathways to being seen and known, but the very possibility of mutual recognition itself.
In the algorithm's defense: but doesn't AI transform through deep learning?
One might argue that AI systems do "change" as they process more data—their outputs evolve, their patterns of response shift, their ability to recognize correlations deepens. But this type of change is fundamentally different from the transformative recognition we see in human encounters. Consider the difference between quantitative and qualitative transformation. An AI system accumulates and refines its patterns quantitatively—it gets "better" at what it was designed to do, but it cannot step outside its fundamental framework. It's like a river that gets wider or deeper but cannot change its essential nature as a watercourse. The change is additive rather than transformative.
In contrast, the kind of transformation we see in human recognition—whether between Lynch and Watts, master and student, or artist and muse—is qualitative. Both parties can emerge from the encounter fundamentally different, with new capacities they didn't possess before, new ways of seeing that weren't contained in their original "programming." Lynch didn't just become "better" at what he already did—his entire artistic vision could expand into previously unimagined territories through his recognition of Watts.
This distinction matters enormously for the future of creative industries. While an AI can certainly surprise us with its outputs, it cannot surprise itself. It cannot experience the genuine uncertainty and vulnerability that makes human recognition transformative. When Lynch asked Watts to "simply tell him about herself," both parties entered a space of genuine uncertainty—neither knew what might emerge from this encounter. This willingness to be changed by what one discovers, to have one's fundamental framework shifted by an encounter, is uniquely human.
Assuming that real live performers are even still sought after, here looms before us the casting process of 2030: straightforward, optimal, cost-effective. A future non-David Lynch describes his requirements, mumbling for about an hour through cigarettes or vapes about his dreams and nightmares, instincts and pre-sentiments, favourite actors both dead and alive, influential characters from novels and films, and the kind of movie he's making. For another half hour, he goes off on a rant about people he can't stand, including his ex-wife. His producer nearby perhaps adds a few quick words about essential practical attributes - no divas, chronic lateness, known substance abuse, or history of mental breakdowns on this tightly budgeted picture. All these requests submitted, now interpreted into clean data points, and the database provides the relevant matches in 3.5 seconds, like the identification of a Russian spy in a Bond film.
No more nervous auditions, no more gut feelings, no more risky bets on unknown talent. But in such a world, would we ever discover another Naomi Watts? Her emergence as an artist required not just raw talent but the fertile uncertainty of human recognition—Lynch's willingness to risk being wrong, to stake something of himself on what he saw in her. This mutual vulnerability created a space where something genuinely new could emerge, something neither party could have predicted or engineered. The algorithm, in its quest for perfect matching, eliminates precisely this fertile uncertainty.
This is why the rush toward algorithmic perfection represents such a profound threat. An AI system that eliminates the possibility of failure also eliminates the possibility of genuine triumph. A casting process that perfectly matches talent to role leaves no room for the magic of unexpected discovery. A story algorithm that optimizes away all risk creates narratives without the possibility of genuine surprise. As AI reshapes Hollywood's landscape, we face a paradox worthy of Greek tragedy. Like Midas whose touch turned everything to gold until he could no longer eat or embrace his loved ones, our pursuit of perfect algorithmic success threatens to eliminate the very thing that gives recognition its power: the possibility of failure.
Act II. Temple of Beautiful Broken Things
Hollywood isn't merely an industry—it's a deity we created through collective devotion, a god sustained by the power of our gathered dreams. Like the gods of ancient Olympus, it derives its power not from inherent divinity but from the focused attention of its worshippers. We built its temples on hills overlooking Los Angeles, crowned its high priests with Academy Awards, and established its rituals of red carpets and opening nights. Through decades of devoted viewership, we transformed a cluster of studios in Southern California into a global dream factory, a place where human possibility could be projected onto screens sixty feet high.
But like all gods, Hollywood's power wanes when worship falters. As audiences fragment, as streaming services multiply, as AI offers to automate the very act of dreaming, we witness something akin to divine twilight. The loss of market share to other forms of entertainment - gaming, social media, Youtube, streaming - is only a physical expression of the loss of trust in a collective dream space that Hollywood used to hold for us. Yet this isn't a simple story of revolution, of digital barbarians at the gates of the dream factory. It's not about revenge against an elite priesthood that kept the temples closed to most supplicants. The truth is both simpler and more profound: we need Hollywood, or something like it, precisely because we are human.
Our species, blessed and cursed with a prefrontal cortex capable of projecting desire and fear into infinite futures, requires a place to house its collective dreams. We need somewhere to project both our highest aspirations and our deepest fears, a shared screen onto which we can cast the shadows and light of human possibility. Hollywood became this space not through any inherent right, but through our collective agreement to make it so.
As the traditional Hollywood system continues to fail, it responds like Oedipus—doubling down on its remaining certainties rather than confronting its fundamental blindness.
Rather than acknowledging its shadow, the industry seeks external technological solutions to intrinsic human problems, attempting to algorithm-proof its future against the very failures that might lead to its redemption. More than ever in this environment, it avoids risk completely, rather than rethinking its approach to managing inevitable risk in life, as in art. Just as Mulholland Drive's terrifying yet ordinary figure waiting behind the diner represents our unprocessed collective shadow, Hollywood's rush toward AI optimization represents its greatest denial yet: the refusal to confront its own darkness. This isn't about the performative confessions we've grown weary of—the PR-crafted apologies, the Instagram-story mea culpas that emerge only when the walls of public opinion have closed in. From Weinstein to Epstein, from systemic abuse to institutional silence, the industry's shadow has grown too massive to contain behind carefully worded press releases and strategic acts of contrition.
True shadow work isn't about damage control. It isn't about waiting until exposure is inevitable and then pivoting to preservation of power. The hobo behind the diner doesn't accept our negotiated settlements, our carefully timed revelations, our strategic shows of remorse. This figure demands full recognition of what we've hidden—not just the individual acts of corruption and abuse, but the systemic darkness that made them possible, the collective willingness to look away as long as the dreams kept coming. By using AI to eliminate risk and uncertainty, the industry is trying to bypass its shadow rather than integrating it, applying a technological solution to a spiritual crisis. But the shadow doesn't disappear when ignored; it grows more terrifying, more powerful, until it forces recognition.
The paradox is that Hollywood's attempt to become invulnerable actually threatens its own divine essence. The great irony is that even gods need vulnerability to remain powerful through seismic periods of change. Their secret envy of human mortality is based on the experience of meaning itself which we take for granted, possible only through an acceptance, and appreciation of limitation and ending. The Greek gods of antiquity could be wounded, could feel jealousy and love, could be transformed by their encounters with mortals. It is this paradoxical aspect of their nature that has kept them immortal to us even in 2025 (with director Christopher Nolan remaking Homer’s The Odyssey for 2026), because it allowed them to be relatable to the zeitsgeist, for their powers to evolve, and for them to remain quotable through dynasties of human transformation. It allowed them to continue having a long-term relationship with us.
Even Empires Must Learn To Cry
What we need isn't necessarily the death of Hollywood but its rebirth—not as a perfect dream factory but as a more human one. Its shadows aren't weaknesses to be disguised and repackaged, but essential parts of the whole story we want to know about in order for trust to be restored —the necessary darkness that makes the light feel earned. What we need isn’t a self-appointed guardian that hides the complex truths of today from us, but guides us with nuanced storytelling that reflects this truth, like proper adults. We may have lost our innocence long ago, but it doesn’t mean our collective inner child won’t come out to play again, once we know it’s safe to do so.
If Diane Selwyn could only face the bum behind the diner and make her peace with it, Betty Elms might have a chance to be reborn again.
We need our industries engaged with dream-making to remember that the power of any creative industrial complex comes not from flawless technical execution which has now become redundant with AI, but from its ability to hold our collective dreams in a safe space, both realized and unrealized. It's a giant responsibility, for sure. And that is why we go to the darkened movie theater for prayer, and refuge from mortal life. Not to be exploited, condescended to, and dumbed down for.
For humanity will always need its dream spaces, its shared narratives, its collective imagination of what's possible. We will always need somewhere to project our hopes sixty feet high, to see our struggles enacted on an epic scale, to witness both the triumph and tragedy of human striving. Hollywood's task isn't to become invulnerable but to remain vulnerable in the right ways—to stay open to genuine transformation, to risk failure in pursuit of truth, to serve as a vessel for dreams that feel both impossible and within reach.
ACT III: All Dreams Are Made of Ashes
The exodus from Los Angeles that many now contemplate mirrors the journey Lynch's characters often take—from certainty into uncertainty, from known territory into dream-space. But Lynchian cinema suggests that truth often lies in precisely these spaces of uncertainty. As industry workers scatter to new territories, might they carry with them seeds of a new creative paradigm, one that integrates human and artificial creativity in ways we can't yet imagine?
And what would Lynch himself make of this moment, had he time to digest its aftermath? Given his history of embracing rather than resisting technological change, one imagines he might see AI not as an enemy of human creativity but as another tool for exploring consciousness itself. Just as he found truth in digital video's limitations, he might discover ways to use AI's nature to reveal something essential about human perception and creativity. If David Lynch were still with us, he would surely say that in our rush to optimize creative processes through AI, we risk creating a Hollywood that can no longer fail—and therefore can no longer truly succeed. The classical Hollywood narrative, with its neat arcs and predictable triumphs, feels increasingly inadequate to capture the complexities of our world. And by further avoiding risk and danger, which is the very heart and soul of any true adventure we want to go on with our movie stars, it renders itself ever more replaceable by AI, which can generate endless variations of success stories while editing out the messy reality of human failure.
There Is No Band, But The Music Still Makes Us Weep
What does it mean to have "vision" when algorithms can generate infinite variations of any creative choice? Perhaps authentic vision in our age isn't about the ability to imagine new possibilities—AI can do that more prolifically than any human—but about the capacity to be transformed by what we see. True vision requires vulnerability, the willingness to be changed by our encounters with the world and others.
Lynch's vision wasn't just about what he could see in Watts, but about his willingness to be altered by what he discovered. Authentic vision in an age of artificial creation might be defined by precisely this quality—not the power to generate endless variations, but the capacity to enter into genuine dialogue with what we do encounter, to risk being transformed by what we recognize. The algorithm can see everything but recognizes nothing because it cannot be changed by what it sees. It can process infinite data points but cannot experience the fundamental uncertainty that makes human vision transformative. Perhaps this is what we must preserve as AI reshapes our creative landscape: not just the ability to see, but the willingness to be seen, to be changed, to emerge from our encounters with art and each other as something new, something we couldn't have predicted or engineered.
The sight of fire advancing across the Hollywood hills writes its message in Lynch's own cinematic handwriting: transformation requires destruction, rebirth first requires death. Just as his characters often journey through nightmare to reach truth, perhaps the industry's current nightmare contains the seeds of its own reinvention. The question isn't whether Hollywood's dream factory will survive, but what new forms of dreaming might emerge from its transformation. Like the mythical phoenix, perhaps what emerges from these ashes will neither be purely human nor purely algorithmic, but something altogether new. Prometheus stole fire from the gods and gave humanity the power to transform its world. Now we stand at a similar threshold, wielding algorithmic fire that could either illuminate or consume us altogether.
As we watch the flames folding onto billionaire mansions as though they were mere styrofoam movie sets geting demolished after a shoot, we’re reminded that Hollywood has always been in the business of transformation after all - turning mere photons of light into stories with the power to transform millions of lives, from a face in a crowd into an icon for a people, and dreams into reality. Now, as AI comes to sift through the fire debris, we face our greatest transformation yet. We needn’t position ourselves against Hollywood as though it were an actual entity, for it will exist by a different name, in a different place, regardless. The question isn't whether we'll preserve the old ways of seeing and being seen, but how we'll carry forward what makes recognition truly meaningful: the vulnerability, the risk, the possibility of mutual transformation that occurs when consciousness truly meets consciousness, whether mediated by divine grace, human vision, or algorithmic insight. The flames flicker into cinders, the nightmare awakens to a smouldering dawn, and “hey pretty girl, it’s time to wake up” as we stand at the threshold of a new way of seeing - one that might, if we're brave enough to embrace it, lead us to a more authentic version of the vision we've been chasing all along.
Dedicated to the memory and legacy of David Lynch, and all who lost a piece of themselves in the fire. May you rebuild with renewed vision and deeper courage.
Building Recognition Together
This essay explores how mutual recognition can sustain and perhaps even insulate us against our industry's current economic pressures. As these ideas spread find resonance, I'm seeking to connect with a small group of creators who share this vision.
B4 THE AI YELLS CUT just reached 100 subscribers – each representing someone who values deep exploration of storytelling in an age of seismic change. Your thoughtful comments and discussions confirm that this philosophical discourse about our technological moment matters.
To mark this milestone and begin building something larger, I'm inviting 20 of our most engaged readers to join an intimate discussion about the future of cinema and visual storytelling. This gathering will help shape THE DIRECTOR'S CIRCLE – a space to explore what it means to be a director in the future, beyond traditional notions of filmmaking. This community is for any creator, regardless of medium, who wants to explore the value of directorial vision and thinking in an age of AI, and how that could benefit their projects, in film and beyond.
If these ideas resonate, consider two ways to help nurture our growth:
1. Join the Discussion: Register for one of 20 spots in our first intimate gathering. Let’s meet the faces and voices behind the substack names and explore these ideas in a live, informal setting. Bring your own coffee, tea or vodka. There isn’t a cost to this, just showing up with your presence, your time, your true selves.
2. Share with Purpose: If you know thoughtful creators who would value this depth of discourse, consider recommending B4 THE AI YELLS CUT to your subscribers. Quality growth means reaching people who share our appetite for substantive analysis.
Our path forward isn't about chasing numbers – it's about building a community of peers who value substance in a high-trust environment, moving beyond the hyperbole of tech, industry and the content cycle, to get closer to the truth of what will matter.
With appreciation,
Gary
Gary, what you just delivered to us was worth what you had to go through to get this out. I mean it.
oh I meant to tell you I'd absolutely love to join The Director's Circle when I get back to LA! It's in person right? I'm staying with a friend in Utah right now but I'll be back soon!