This study explores the challenges that pre-service teachers face when developing interactive video assessments, with a focus on the technological, pedagogical and psychological aspects involved. While interactive videos have been shown to increase student engagement, some pre-service teachers struggle to create them. Three English education students from Mulawarman University were purposefully selected for the study. Data were collected through semi-structured interviews and focus group discussions and analysed using thematic analysis. The findings revealed technical challenges like unstable internet and delayed AI. Pedagogical challenges such as teachers relied heavily on AI, and limiting creativity. Psychological challenges when participants did not trust the accuracy of AI or the grammar of AI-generated questions, necessitating additional scrutiny. Despite these challenges, the study showed that participants transitioned from passively accepting the AI's output to actively adapting and refining it. This demonstrates that, when teachers take ownership of the contextualisation of materials, interactive video assessments can be effective, provided they are supported by thorough training in digital pedagogy and AI literacy.