August 20, 2026, (Inside AI) — Kuaishou reported that its Kling AI video-generation business generated more than RMB850 million in revenue during the second quarter, up more than 200% year on year and 30% from the previous quarter. The company disclosed the figures in its latest earnings release, which also showed total second-quarter revenue of RMB35.5 billion, up 1.4% year on year, while adjusted net profit fell 30% to RMB3.9 billion.
The surge in Kling AI revenue stands out against a backdrop of pressure on Kuaishou's core advertising and livestreaming businesses. Kling AI's first-half revenue reached RMB1.5 billion, making it one of the company's clearest growth engines. The figures were first reported by Caixin, a Chinese financial news outlet.
Kling AI is a text-to-video and image-to-video generation platform that Kuaishou launched in June 2024. It competes with domestic rivals such as ByteDance's Jimeng and international tools like OpenAI's Sora. Unlike many generative AI products that rely on subscription pricing, Kling AI has aggressively pursued enterprise customers in advertising, e-commerce, and short-video production. That commercial focus helps explain the rapid revenue growth at a time when consumer AI apps often struggle to monetize.
Kuaishou has not broken out Kling AI's profit margins, but the company's overall profitability declined in the quarter. The 30% drop in adjusted net profit suggests that investments in AI infrastructure and model training are weighing on the bottom line. Kuaishou has been building its own large language models and video-generation models, which require substantial spending on GPUs and cloud computing.
The earnings report highlights a broader shift in China's tech industry. Companies that once relied on advertising and e-commerce are now betting on generative AI as a new revenue stream. Alibaba, Tencent, and Baidu have all reported rising AI-related revenue, but few have shown growth as fast as Kling AI's 200% year-on-year increase. That pace may be difficult to sustain as the market matures and competition intensifies.
Kling AI's Commercial Strategy Bypasses Consumer Subscription Fatigue
Kling AI's revenue model differs sharply from Western AI video tools. Instead of charging individual users a monthly fee, Kuaishou has targeted businesses that need video content at scale. E-commerce merchants use Kling AI to generate product videos. Advertisers use it to produce localized campaigns. Short-video creators use it to speed up production. This enterprise-first approach has allowed Kuaishou to capture revenue faster than consumer-focused rivals.
However, the strategy carries risks. Enterprise customers demand reliability, customization, and data security, which raise costs. Kuaishou must also defend its market share against ByteDance, which owns Douyin and TikTok and has deep resources for AI development. ByteDance's Jimeng video tool has been integrated into its advertising ecosystem, giving it a distribution advantage.
AI Revenue Growth Cannot Mask Core Business Weakness
Kuaishou's total revenue grew just 1.4% year on year, a sharp slowdown from previous quarters. Advertising revenue, the company's largest segment, faced headwinds from a weak macro economy and competition from Douyin and WeChat video accounts. Livestreaming revenue also declined as regulators tightened rules on virtual gifting and e-commerce livestreams.
The contrast between Kling AI's explosive growth and the core business's stagnation raises questions about Kuaishou's long-term strategy. If Kling AI can maintain its trajectory, it could offset declines elsewhere. But if growth slows, Kuaishou may face pressure from investors who are already concerned about falling profits.
Kuaishou's management did not provide detailed guidance for Kling AI's future revenue in the earnings release. The company said it would continue to invest in AI research and development, particularly in video generation and multimodal models. Analysts will be watching whether Kling AI can reach RMB2 billion in annual revenue by the end of 2026.
For now, Kling AI's performance offers a rare bright spot in a challenging quarter for Kuaishou. The company's ability to turn a generative AI product into a nine-figure revenue stream within two years of launch is a notable achievement in an industry still searching for sustainable business models.
