Ari Alexander Ergis Magnússon was born in Reykjavik, Iceland, to an Icelandic father who was a playwright, film and theatre director and a Siberian-Yakutian mother who is an actress and visual artist. Magnusson's mother graduated from the acting school GITIS in Moscow and his father graduated from the legendary film school VGIK where his parents actually first met. They moved to Reykjavik, Iceland from Moscow in 1966 after his father lost faith in the utopian dream of the USSR.

Magnússon lived in Aarhus, Danmark 1979-83. He moved to Paris in 1989, studied at the Sorbonne University 1989-90. He earned a BFA in fine arts from Parsons Paris School of Art and Design, 1991-96. Since then he has exhibited his paintings, installations and video work in galleries in Iceland, Danmark, France, England, USA, China, Argentina, Russia and Siberia.

Magnusson has received several awards and was nominated to the Nordic Council Film Prize in 2005 for his music documentary Screaming Masterpiece, led by Björk and Sigur Rós.

Magnússon premiered his first narrative feature film MIHKEL, at the 2018 Busan International Film Festival in South-Korea, in competition at the Warsaw International Film Festival in Poland, cinema release in Estonia and Iceland same year. It's a dramatic film based on a real-life tragedy that took place in Iceland in 2004, involving two childhood friends from Estonia. The film was produced by Fridrik Thor Fridriksson, Evil Doghouse, Amrion Production and Truenorth with full production support from KMÍ the Icelandic film Centre and development support MEDIA Programme of the European Union.

Ergis Film Production, owned by Ari Magnusson, was established in 2002. The company's focus has been on documentaries, mostly on artists, and the company has been involved with major working artists: Björk, Erró, Sigur Rós, Gudbergur Bergsson, Thor Vilhjálmsson, Ólafur Elíasson, Sigurdur Gudmundsson, Alain Robbe Grillet, David Lynch, Kristján Gudmundsson, Matthew Barney and Yoko Ono. Magnusson has worked closely with a team of experienced professionals: producer and film director Fridrik Thor Fridriksson, Los Angeles based film producer Sigurjón Sighvatsson, writer Jón Proppé and co-director of the Serpentine Galley in London, Hans Ulrich Obrist.