The Arena

Kling AI's revenue jumps 200% as Kuaishou's core business stalls

Kuaishou's latest earnings painted a brutally split picture: its legacy video, livestreaming, and e-commerce lines barely grew, while its video-generation model Kling AI carried the quarter as the company's only real growth engine.

Kling AI's single-quarter revenue surged past 200% year over year, landing at 850 million yuan in Q2 — the firm's clearest sign yet that its AI bet is paying off commercially.

Kuaishou said Kling AI booked 850 million yuan ($119 million) in second-quarter revenue, up more than 200% from a year earlier, after 650 million yuan in Q1. That puts the video-generation model on track for roughly 1.5 billion yuan in first-half revenue. Management has now broken out Kling's numbers separately for two straight quarters — a deliberate narrative shift as the company steers investors away from a shrinking traditional business toward AI. The contrast is stark: total Q2 revenue of 35.5 billion yuan grew just 1.4%, livestreaming fell 13.5%, and online marketing posted its slowest growth in three years at 4.4%. Adjusted net profit dropped 30.3% to 3.9 billion yuan, with margins squeezed by faster depreciation on AI compute and a 21.9% jump in bandwidth costs.

Kling is the rare Chinese model maker that has translated technical hype into a real, growing revenue line — arguably the strongest commercial case in the consumer video-generation race outside the US. The model has found its footing as a paid creation tool for short-video producers and marketers, and Kuaishou is pouring the profits from its decaying core into feeding it, keeping capital expenditure guidance at 26 billion yuan.

The trade-off worth watching is margin. Kuaishou's AI spending is compressing near-absent profits in its legacy business, and analysts note the market has already priced much of the hope into Kling's reported $18 billion valuation — which Kuaishou holds a 68% stake in. The model is growing, but it is a long way from covering the parent's slowing base. That makes Kuaishou a bet on Kling's standalone ceiling rather than a conventionally healthy media company.

Which Chinese AI model maker do you think turns a sustainable profit first — and which one is quietly overvalued? Tell us in the comments.

Sources: Sina Finance · MyZaker · Tencent News · Sina Finance (Q1 earnings)

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