If any engineers think that's what they're doing they should be fired. More likely it's product managers who barely know what's going on in their departments except that there's a word "AI" pinging around that's good for their KPIs and keeps them from getting fired.
Videos are expensive to store, but generative AI is expensive to run. That will cost them more than storage allegedly saved.
To solve this problem of adding compute heavy processing to serving videos, they will need to cache the output of the AI, which uses up the storage you say they are saving.
