On March 25, Kuaishou opened its earnings call for the fourth quarter and full year of 2024 with a familiar overture: artificial intelligence. It wasn’t just a buzzword sprinkled in the report, but the headline. CEO Cheng Yixiao made it clear that the company’s future would hinge on AI, not merely as a tool for optimization, but as a force capable of generating new revenue and carrying Kuaishou through the tech cycle’s ups and downs.
That bet is starting to show returns. For the first time, Kuaishou disclosed revenue from Kling, its video generation model: over RMB 100 million (USD 14 million) as of February 2025. It’s a modest figure in the grand scheme of things, but it signals that the company is moving toward monetization, not just moonshots.
Kuaishou’s approach to AI is a two-pronged strategy: supercharge existing businesses while carving out new traffic gateways.
On the user side, AI is sharpening the platform’s recommendations. In Q4 2024, the app reached 401 million daily active users (DAUs) and 736 million monthly active users (MAUs), up 4.8% and 5% year-on-year (YoY), respectively. That’s no small feat in a market where user growth has largely plateaued. According to the company, large models now analyze everything from short videos and livestreams to comment threads and individual interests to serve up stickier recommendations.
AI is also reshaping Kuaishou’s revenue engines: advertising and e-commerce. Its automated ad solution, Universal Auto X (UAX), was cited as a key driver of growth. Online marketing revenue rose to RMB 20.6 billion (USD 2.9 billion) in Q4, a 13.3% increase. For the full year, ad revenue reached RMB 72.4 billion (USD 10.1 billion), up 20.1%. The share of UAX-driven ad spend in external-facing campaigns surpassed 55%, up five percentage points from the previous quarter.
But the strongest signal of generative AI’s traction came from daily ad spend on AI-generated content (AIGC), which reached RMB 30 million (USD 4.2 million) in Q4—up about 50% from the previous quarter. That puts total quarterly AIGC spend at roughly RMB 2.76 billion (USD 386.4 million), accounting for 13.4% of total ad revenue.
For all its behind-the-scenes enhancements, Kling is the showpiece. In Q4, Kuaishou launched version 1.6 of the model and rolled out a standalone Kling app—an effort to create a new consumer entry point. During a government press briefing in March, Kling was name-checked by Chen Changsheng from the State Council Research Office, who said its performance had already outpaced OpenAI’s Sora in certain evaluations. Alongside Unitree’s dancing robots and DeepSeek’s global rise, Kling has emerged as one of the poster children for China’s AI ambitions.
Cheng framed Kling as more than a feature, describing it as Kuaishou’s tool to reimagine content creation while defending its turf as a short video heavyweight.
There’s a flipside. Kuaishou’s e-commerce GMV (gross merchandise value) hit RMB 462.1 billion (USD 64.7 billion) in Q4, up 14.4% YoY. That’s slower than the 15.1% growth in Q3—and well below the 20–30% pace of 2023. The deceleration heightens the urgency to diversify, and AI is the company’s strongest card.
Still, investors remain cautious. Kuaishou’s R&D spend in 2024 was RMB 12.2 billion (USD 1.7 billion), essentially flat YoY. That pales in comparison to ByteDance, whose AI-related capital expenditures reportedly reached RMB 80 billion (USD 11.2 billion), according to a research note from Zheshang Securities cited by local media.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Lan Jie for 36Kr.