Following the video being made private on the McDonald's Netherlands YouTube channel, The Sweetshop's chief executive Melanie Bridge defended the advert.
As quoted in Futurism, external, she said the production process took "seven weeks" where the team "hardly slept" and created "thousands of takes - then shaped them in the edit just as we would on any high-craft production".
"This wasn't an AI trick," she said. "It was a film."
In a statement to BBC News, McDonald's Netherlands said the video was meant to "reflect the stressful moments that can occur during the holidays" but had decided to remove the advert.
"This moment serves as an important learning as we explore the effective use of AI," it said.
Where normally a high-publicity Christmas campaign could take up to a year to pull off, companies have begun to look to firms which can produce films in a much shorter time span, using prompts from generative AI tools to create new video content.
Coca-Cola seems to have been able to sway at least some of the general public with its second AI-generated Christmas ad in a row.
While the use of AI to create the advert has been divisive, a report from analytics company Social Sprout found it had a 61% "positive sentiment rating", external from commenters online.
But several other businesses such as the Italian luxury fashion house Valentino have come under fire for using the technique in their campaigns, with critics calling Valentino's advert "cheap" and "lazy".
BBC News has contacted The Sweetshop and TBWA\Neboko for comment.