Following its global AI video generation frenzy, Sora is set to exit the stage just two years after its debut, announced on March 25. OpenAI's decision to abandon Sora highlights the significant challenges in the video generation sector, where even leading global AI players find it difficult to sustain such capital-intensive projects. As video generation must evolve from a technical showcase into a practical workflow tool, publicly listed companies centered on this narrative are now compelled to present more detailed commercialization roadmaps.
On March 25, Kuaishou Technology (01024.HK) released its financial results for the fourth quarter and full year of 2025. The company reported a 11.8% year-on-year increase in total revenue for Q4, reaching 39.6 billion yuan, with adjusted net profit rising 16% to 5.5 billion yuan. For the full year, total revenue grew 12.5% to 142.8 billion yuan, while adjusted net profit reached 20.6 billion yuan, up 16.5% year-on-year, and the adjusted net profit margin improved to 14.5%. Throughout the year, Kuaishou continued to increase its AI investments while steadily improving profitability.
In terms of AI commercialization, Kuaishou's AI video generation platform, Kling AI, generated revenue of 340 million yuan in the fourth quarter, slightly below initial institutional expectations. Earlier reports had indicated that Kling AI's monthly revenue exceeded $20 million in December last year, leading institutions to raise their Q4 revenue expectations for the platform from an initial guidance of 300 million yuan to a range of 350-400 million yuan. For the full year of 2025, Kling AI's total revenue amounted to 1.04 billion yuan, approximately $150 million. Kuaishou's founder and CEO, Cheng Yixiao, revealed that as of January this year, Kling AI's annualized revenue run rate (ARR) had surpassed $300 million.
Cheng expressed strong confidence that Kling AI would achieve more than double revenue growth in 2026, based on current momentum and commercialization progress. He stated that as model capabilities continue to improve, product features are refined, and adaptability to professional scenarios strengthens, Kling AI's commercialization is expected to accelerate further. This indicates that Kuaishou's AI strategy has officially moved beyond the "storytelling" phase into a more significant monetization period.
While Kuaishou competes intensely with rivals like Douyin in the advertising and e-commerce sectors within existing markets, in the AI field, the company aims to build its moat by leveraging first-mover advantages in technology monetization. Since the fourth quarter of 2025, Kling AI has successively launched the unified multimodal video model Kling O1, the Kling 2.6 model with "audio-visual synchronization" capabilities, and the Kling 3.0 series based on an All-in-One concept. Kuaishou management noted that improvements in model quality and product innovation have driven continuous breakthroughs in commercialization.
The iteration of video generation models by major players is accelerating. ByteDance's Seedance 2.0 model, launched before the 2026 Spring Festival, garnered global attention. When asked about the impact of increasing industry competition on Kuaishou, Cheng Yixiao remarked that video generation technology and products are still far from maturity. He views the rapid updates from Seedance 2.0 and other large models as positive for the industry, as they lower the barrier for general users while increasing the penetration of AI video generation across more application scenarios, thereby expanding the overall market.
Cheng pointed out that Seedance 2.0's support for multimodal input aligns with Kling O1's technical approach, validating Kuaishou's foresight in focusing on multimodal model iterations. He believes that Kling's models and product capabilities remain globally leading, with top benchmark scores in video generation model rankings. Kling 3.0 excels in character consistency, controllability, physical realism, and stability in complex scenes, further strengthening its differentiated advantages for professional creators and enterprise clients.
In a recent report, Goldman Sachs highlighted that Kling 3.0 maintains competitiveness in cinematic-level details and pricing advantages, consistently ranking among the world's top models in third-party benchmarks. Despite fierce market competition, Goldman Sachs believes the AI video generation sector is not a zero-sum game. Both Kuaishou's Kling and ByteDance's Dreamina 2.0 are expected to benefit from the rapidly expanding market, with AI advancements reshaping value distribution across the entertainment industry. The firm projects the global AI video generation market to grow tenfold over the next five years, reaching approximately $29 billion by 2030, enough to accommodate multiple leading players.
To maintain competitiveness in video generation, Kuaishou must continue increasing investments. The company's CFO, Jin Bing, stated that total capital expenditure for 2026 is expected to reach approximately 26 billion yuan. The additional 11 billion yuan compared to 2025 will primarily support computing power for Kling's large model and other foundational models, alongside routine server procurement for offline data storage and processing, as well as data/computing center construction.
AI is becoming a core growth engine for Kuaishou. Beyond direct subscription revenue from Kling AI, AI has significantly enhanced efficiency across Kuaishou's business segments. Management emphasized ongoing efforts to deepen the application of large model technology in content and commercial ecosystems, as well as internal organizational infrastructure improvements. Online marketing services remain Kuaishou's primary revenue source, accounting for over half of total income. In the fourth quarter, revenue from online marketing services reached 23.6 billion yuan, a 14.5% year-on-year increase. Kuaishou noted that generative recommendation models and intelligent bidding models contributed approximately 5% incremental growth to domestic online marketing service revenue during the quarter. Additionally, consumption generated by AIGC marketing materials totaled 4 billion yuan, up from over 3 billion yuan in the previous quarter.