Kuaishou’s AI Video Spinoff Unveils New Model in ByteDance Chase

Kuaishou Technology’s AI spinoff announced its latest video-generation model ahead of a potential Hong Kong listing, stepping up efforts to close the gap on industry leader ByteDance Ltd.

The Kling 4.0 model doubles the maximum length of video clips it can generate to 30 seconds and can accept user input via more than a dozen references in formats such as text, images and existing video. It marks a step up in sophistication, and Kling’s also allowing users to add up to 10 so-called keyframes — images that establish the desired look for a particular segment of the video — for greater control. While the new model is still under testing among select users, a lite version is now available to annual subscribers and the full release is coming in October, the company said.

The Beijing-based Kling team, which now works out of its own offices and operates independently of Kuaishou, is among a wave of Chinese AI video platforms seeking to pull in revenue from global filmmakers, advertisers and creative studios. It got a boost when OpenAI shuttered its Sora video project, but the lead in recent times has been grabbed by ByteDance Ltd.’s Seedance, which has delivered some of the most realistic AI videos to date.

Kling raised $2.8 billion in its debut funding round in July from a group of investors including Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Baidu Inc., valuing the fast-growing unit at about $18 billion after the investments. Kuaishou, which still holds a majority stake in Kling, is now trading below that price tag at roughly $17 billion. Kuaishou has given up more than 60% of its value over the past year, as initial enthusiasm about its progress with generated video was dampened by the release of Seedance and the broader challenges with monetizing such computationally-intensive content generation.

Still, hopes are high for the long-term potential commercial power of video created with artificial intelligence. Kling’s annualized revenue topped $500 million in March, though sales growth slowed to 200% in the most recent quarter from 300% in the previous period. For Kuaishou, a TikTok-style short video platform, the core business in advertising and livestreaming is faltering, and earnings fell by the most in five years last quarter – but the fast growth of AI video presents a path to more sustainable profitability.

Kling has so far been among the quickest to monetize its video model through subscriptions and developer access, though maintaining its head start will prove challenging in a sector where technological leads are short-lived. ByteDance’s Seedance 2.5, launched in July, is now the go-to choice for many creators, while offerings from Alibaba and MiniMax Group Inc. have also gained traction for their competitive price-to-performance ratios.