AI Video Generation Leads China’s Kuaishou To 84% Stock Surge

Few major companies have tried to pull off a pivot to AI as swiftly as Kuaishou Technology.

Long known as a laggard to ByteDance Ltd.’s TikTok in short video streaming, Kuaishou has in 18 months, revamped itself and made strides into the field of AI-generated video. Its shares have surged 84% in value over the past year, with excitement about the global potential of its Kling video generator sparking another double-digit jump on Monday.

Kuaishou’s Kling AI app was the top-grossing graphics and design app on iPhones in South Korea and Russia as of Jan. 2, and in the top 10 in markets including the US, UK, Japan, Australia and Turkey, according to Sensor Tower. Spending only a fraction of what better-known rivals are pouring into AI, the company has projected $140 million in annual revenue for 2025 from AI video. It’s amassed 60 million users and sales are accelerating as it builds more brand recognition beyond China.

All this came about because the Beijing-based company refused to be beaten to market by OpenAI. When the San Francisco-based startup teased its Sora AI video tool in February 2024, Kuaishou set the audacious goal of introducing a competing and comparable solution by that summer — and met its objective with Kling’s debut in July.

“Timing is critical, as this is a resource-constrained game. If you go in too early, you burn cash in vain; too late, and you lose the advantage,” Kuaishou’s chief technologist Gai Kun said in an interview.

Gai is the mastermind behind Kuaishou’s rapid rise, overseeing a team of hundreds developing Kling. To date, Kling AI has enabled the creation of more than 600 million videos. To capitalize on the strong start, he next wants to build a content platform dedicated to AI-first video. He sees only a narrow window of opportunity if Kuaishou wants to be the first to build it.

Describing the short-video specialist as a midsized player lacking a bottomless war chest, Gai sees the company’s best opportunity in perfecting product timing and making fewer mistakes. Now valued at roughly $41 billion, Kuaishou has regained investor favor largely because of Kling, the rare consumer-facing AI app that’s yielding steady revenue. It’s also growing among business customers, with more than 30,000 enterprises and developers integrating its APIs.

On global benchmarking site Artificial Analysis, Kling is the only Chinese model ranked in the top three for both text-to-video and image-to-video performance. To stay ahead of local rivals like ByteDance and startups like MiniMax, Gai’s team is keeping the pace of upgrades high.

In December, Kling rolled out a new O1 model that processes text, image and video prompts simultaneously. Justine Moore, a partner at Andreessen Horowitz who’s investing in the AI tools sector, likened the release to Google’s image-generating Nano Banana – which has been lauded for its quality. She shared several examples of Kling O1 transforming moving objects on command, including a clip that converted a cat into a chihuahua. Another user showed how they combined Nano Banana with Kling to create a high-fidelity movie scene.

Kling users can now steer camera movements by pairing a video with a script, or generate footage from a manga-style storyboard combined with a character reference image. That level of creative freedom is central to the O1 upgrade, leveraging the relative maturity of the company’s technology.

While OpenAI and big industry incumbents like Alibaba Group Holding Ltd. see video generation as part of a broader AI ecosystem play, Kuaishou has sidestepped the cash-burning race to build all-purpose foundation models. Kling operates with its own profit and loss structure, Gai said, effectively functioning as an internal startup.

In the video-focused sector, Kling competes with US rivals Runway and Luma AI, which each raised hundreds of millions of dollars last year at valuations of $3 billion or more. Kling’s paid subscription plans range from $7 to over $100 per month — roughly in line with its peers — yet the Chinese platform has shown faster progress in monetization. As to OpenAI, the San Francisco company has a two-tier system: its best Sora 2 video tools are part of the $200 monthly ChatGPT Pro subscription, or users can access a free mobile app of the same name targeting viral, TikTok-style sharing.

What Bloomberg Intelligence Says

As China’s leading text-to-video engine, Kling should continue to gain traction domestically and in emerging markets. Its prospects in developed markets are less certain due to competition from established rivals such as Sora and Runway, as well as lingering intellectual property protection concerns.

— Robert Lea, BI analyst

American services like Sora and Google Veo from Alphabet Inc. aren’t available in China, helping Kling at home, but the majority of paid users are based overseas, Gai said. Among the prominent groups are film studios, marketers and social media influencers, he added. As of 2025’s first quarter, some 70% of Kling revenue came directly from user subscriptions and the rest from enterprise clients integrating the software, according to company executives.

Looking ahead, Kuaishou’s tech chief predicts a paradigm shift in the way we consume AI content. Instead of tacking generated AI video on top of existing services, there’ll be demand for an AI-native entertainment hub. Ordinary users, for example, could be rendered as protagonists of a short drama series or an interactive video game, Gai said. The shift could arrive within one to three years, he added.

“Every content platform rests on a production ecosystem, and its tolerance for AI disruption is finite,” Gai said. “If you want to be a real leader in any specific domain of AI, you have to imagine the future.”

That appetite for high-stakes bets reflects a career spent in China’s cutthroat internet sector. A Tsinghua University-trained machine learning scientist, Gai joined Alibaba in 2011 through its elite researcher program, working on the e-commerce behemoth’s advertising platform.

Gai joined Kuaishou in 2020 and by early 2023 he was helping assemble a small team of AI researchers after he and Chief Executive Officer Cheng Yixiao concluded that the company had to embrace the technology. A year later, Gai issued the mandate for Kuaishou to beat OpenAI by releasing a fully trained, public-ready video-generation model first. It was an uncomfortable time but it was essential for the executive who puts a premium on timing.

“When I proposed that goal, it shocked everyone in the room,” Gai said. “But if we want to go from nobody to somebody, we have to be the first to ship.”