Why am I getting the following error: "Failed to save item. Save to iCloud Drive instead?"

I am getting the above error. How can I resolve this?

I am transferring a video file from my mac to my iPhone via airdrop (iPhone 7 on 11.2.6).

I was able to airdrop this file to a friend who also has an iPhone 7 (on 11.2.0) and the video played just fine.

On my iPhone, I get this error why I try to airdrop. The video is 100MB and I have about 9GB free space.

I am able to airdrop pictures fine. Video doesn't work. Please help.

Is there any settings that I am missing?