"The Accomplice"
Originally published in Worlds of If Science Fiction, 1967.
Bob Royce, CEO of Royce Technology, Inc., and his security officer Arnold Su have discovered that one of their employees has embezzled 4 million dollars worth of computer time. The evidence points to Howard Prentice, a 90-something renaissance man doing computer science research for the company. Prentice reveals that he has used the computers to create a 4-hour computer-generated film adaptation of J.R.R. Tolkien's The Lord of the Rings. This file is the culmination of a 30-year project by Prentice and his wife Moira to turn film into an art form which can be produced by individual artists.
— Wikipedia: The Collected Stories of Vernor Vinge
The full issue of Worlds of IF (April 1967), including this story, is available to read online at the Internet Archive.