IMPLICATOR
Kuaishou said in a Hong Kong stock-exchange announcement on Tuesday that it was "assessing a proposal to restructure" its Kling AI unit, following reports of a possible US$20 billion valuation and US$2 billion raise. Kuaishou shares jumped as much as 10 percent before closing nearly 2 percent higher. Four months earlier, Kuaishou said Kling had passed US$20 million in December monthly revenue, or a US$240 million annualized run rate, 19 months after launch.
The filing landed against a leaderboard that has shifted away from US labs. Artificial Analysis placed Dreamina Seedance 2.0 720p and HappyHorse-1.0 in its top two text-to-video slots on its current leaderboard, with Google's Veo 3.1 in the next cluster. Both Chinese systems sit inside parent companies that already operate the country's largest short-video feeds, which gives their generation models a built-in distribution and training loop most text-first labs lack.
Key Takeaways
- Kuaishou is weighing a Kling AI restructure after reports of a US$20 billion valuation.
- Seedance, HappyHorse and Kling now sit near the top of creator-facing AI video rankings.
- Kling disclosed a US$240 million annualized run rate in December and more than 60 million creators.
- Enterprise buyers still have to clear rights, training-data and permission risks before publishing generated video.
AI-generated summary, reviewed by an editor. More on our AI guidelines.
The feed is the benchmark
Kuaishou's 2025 annual report listed 724.6 million full-year average monthly users and 410.2 million full-year average daily users. Average daily time per daily user reached 126.0 minutes in the fourth quarter. ByteDance runs TikTok internationally and Douyin in mainland China on the same short-video format. Those feeds give Kuaishou and ByteDance a distribution channel most text-first labs lack, though Google has its own YouTube counterweight.
Ben Chiang, founder of Director AI, told the Financial Times that "most of the American models that we've tried are not very good at video generation." Director AI mainly uses Kling, and switches between Seedance 2.0 and MiniMax's Hailuo by task and cost. The buying test was his second line, "how well the model follows the prompt."
The product claims match the creator quotes. ByteDance says Seedance 2.0 takes up to nine images, three video clips and three audio clips, then produces 4 to 15 seconds of output at 480p or 720p. The official detail is almost gratuitous. Frosted glass, plush fabric, acrylic.
George Won, an independent AI filmmaker in Tbilisi, told the FT that Seedance handles "aggressive camera angles and speed without losing the character's face or lighting contrast." He gave the failure mode too. "Most AI models start to wobble or drift when things move fast." A filmmaker cuts that shot.
Revenue turns quality into distribution
Kling's revenue line puts payment next to preference. Kuaishou said Kling reached US$240 million in annualized revenue in December, up from US$100 million in March, while SCMP later reported, citing anonymous LatePost sources, that ARR had reached US$500 million, about double the level before Chinese New Year. The service had more than 60 million creators, more than 600 million generated videos and more than 30,000 enterprise users.
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MiniMax makes the same adoption point. Hailuo Video 01 helped creators generate more than 370 million videos before Hailuo 02, MiniMax said. That total is not directly comparable with Kling's 600 million, but it points to repeated use rather than one-off curiosity. Three artists made a Hailuo 02 showcase in 1.5 days from multiple 6 to 10 second clips, then edited the work after generation.
Vincent Yang, chief executive of Firework, told the FT older generated clips were "cringey and robotic." His next line made the sales case. "Now we're at the point where you can't tell if it's AI or human." He said "one retailer asked us to create 100,000 videos for its product pages," a volume that makes manual production too expensive and model variance useful. In Kuaishou's fourth-quarter release, AIGC marketing materials drove RMB4.0 billion of online marketing services spending, and generative recommendation and bidding models drove roughly 5 percent growth in domestic online marketing services revenue.
Permission is the buyer test
ByteDance's Seedance launch note says real human portraits require "identity verification or prior legal authorization." That same reference ability raises the rights question an enterprise buyer has to clear. The Implicator previously covered the Hollywood alarm around Seedance outputs. In a letter obtained by Axios, Disney accused ByteDance of packaging Seedance with a "pirated library" of Disney characters, and outside attorney David Singer called the alleged conduct "willful, pervasive, and totally unacceptable."
Disney named Spider-Man, Grogu and Peter Griffin as examples in the letter, according to Axios.
The Disney letter resets the procurement question for marketing and brand teams evaluating these systems. Adobe said Firefly was trained on licensed Adobe Stock and public domain content, and David Wadhwani described the product as built for "IP-friendly tools" used in "ideation and production." Google has priced Veo 3.1 Lite for developer availability at less than half the cost of Veo 3.1 Fast, according to its pricing page, while Runway sells Gen-4 controls for duration, aspect ratio and fixed seed.
OpenAI's Sora points to the same split from the opposite direction. Axios reported in March that OpenAI was discontinuing the Sora app and API while its video team kept working on world simulation research. Axios tied the shutdown to compute pressure and reported that the Disney licensing and investment deal was winding down. Kuaishou's announcement used the phrase "assessing a proposal to restructure." For enterprise buyers comparing Kling, Seedance, Veo and Firefly, the procurement question that comes after the leaderboard is whether each system's training corpus and licensing terms hold up under legal review.
Frequently Asked Questions
What did Kuaishou say about Kling AI?
Kuaishou said it was assessing a proposal to restructure Kling AI after reports of a possible US$20 billion valuation and US$2 billion raise. The company said the proposal remained preliminary.
Why are Chinese AI video models leading creator rankings?
The strongest Chinese models are tied to short-video platforms, creator tools and commerce loops. That gives ByteDance and Kuaishou fast feedback from users who prompt, reject, remix, share and pay inside video-native products.
How big is Kling AI as a business?
Kuaishou said Kling reached more than US$20 million in December monthly revenue, equal to a US$240 million annualized run rate. The service also reported more than 60 million creators and 600 million generated videos.
What makes enterprise adoption harder?
Enterprise buyers have to know whether generated clips can be published legally. Disney's complaint about Seedance shows how reference-driven video can create copyright and character-use problems before a brand ships an asset.
How do US tools compete with Chinese AI video models?
Adobe, Google and Runway compete less on feed-native virality and more on production controls, provenance, commercial-safety claims and developer access. Those features matter after a marketing or studio team moves from experiment to publication.
AI-generated summary, reviewed by an editor. More on our AI guidelines.
Marcus Schuler
Editor-in-Chief and founder of Implicator.ai. Former ARD correspondent and senior broadcast journalist with 10+ years covering tech. Writes daily briefings on policy and market developments. Based in San Francisco. E-mail: [email protected]
