Analysis Report on the Sustainability of ARR Growth for Kuaishou Keling AI

Based on collected data and analysis, here is an in-depth research report on the sustainability of ARR growth for Kuaishou Keling AI’s video generation business.

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Since its launch in June 2024, Kuaishou Keling AI has seen leapfrog ARR growth [1]:

Time Node	ARR Scale	Month-over-Month Change	User Scale
March 2025 (10 months after launch)	$100 million	-	22 million
June 2025	approx. $100 million	Stable	35 million
August 2025 (end of Q2)	approx. $125 million	+25%	45 million
December 2025 (19 months after launch)	$240 million	+92%	60 million

: Over the 9-month period from March to December 2025, ARR grew from $100 million to $240 million, representing a , with a monthly compound growth rate of approximately 10.2% and an annualized growth rate exceeding 220% [1][2].

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• Global Blind Test Ranking
  : In authoritative evaluations such as Artificial Analysis, Keling 1.5 ranked second globally by votes, trailing only Google Veo 2 and outperforming competitors like OpenAI Sora and Pika [3]
• Technological Barrier
  : Built on the self-developed DiT architecture, integrating 3D spatiotemporal joint attention mechanism to achieve physical law simulation and complex motion generation
• Iteration Speed
  : Updates once every two weeks on average, with over 20 iterations within 10 months. Differentiated features such as “simultaneous audio and video output” form competitive barriers [4]

• Healthy Revenue Structure
  : Producer (P-end) paid subscription members contribute approximately 70% of revenue, while B-end API services account for about 30%, forming a stable recurring revenue base [2]
• Enterprise Customer Expansion
  : Has partnered with over 30,000 enterprises cumulatively, with API call volume exceeding 40 million times. Representative clients include well-known enterprises such as Xiaomi and BlueFocus [1]
• Advantages of Subscription Model
  : A SaaS-like subscription mindset is gradually taking shape, with users shifting from “trial-based usage” to “sustained payment” [4]

• Content Production-Consumption Closed Loop
  : AI content generated by Keling can be directly published and consumed on the main Kuaishou platform, reducing customer acquisition costs and enhancing user stickiness
• Advertising Business Synergy
  : B-end clients of Keling may be converted into potential clients for Kuaishou’s advertising business, forming synergistic business growth
• International Layout
  : Overseas markets contribute 70% of revenue, effectively diversifying single-market risks [4]

• Pricing Competitiveness
  : The cost per Keling video generation is approximately RMB 0.83, which is about 1/4 of that of Google Veo 2 and OpenAI Sora. The cost-effectiveness of “high volume and affordability” is an important reason for its global popularity [3]

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• Continuous Investment by International Giants
  : Google Veo 2/3, Meta Sora, OpenAI Sora, etc. continue to iterate, and ecological synergy layouts such as YouTube Shorts are accelerating [3]
• Fierce Domestic Competition
  : ByteDance’s Seedance has obvious synergy advantages with the Douyin ecosystem, Alibaba’s Wanxiang adopts an open-source strategy to lower technical barriers, and Baidu, Tencent, MiniMax, etc. have all entered the market [4]
• Risk of Technological Homogenization
  : The DiT architecture has become the industry mainstream, increasing the difficulty of differentiation

• Low GPU Utilization
  : Kuaishou’s GPU computing power utilization has long been below 10%, severely restricting the profitability of its AI business [4]
• Cost-Revenue Imbalance
  : Computing power investment and revenue growth may become unbalanced, and long-term operation may rely on profit subsidies from the main platform
• Increased Capex
  : The group’s capital expenditure in 2025 is expected to grow by mid-to-high double digits year-on-year to RMB 14 billion [2]

• Risk of User Churn
  : There is uncertainty in users’ willingness to pay for AI tools, and users may stop paying as the novelty wears off
• Market Penetration Ceiling
  : The base of 60 million creators is already large, increasing the difficulty of further customer acquisition
• Limited Room for ARPU Growth
  : Need to increase payment depth based on existing users

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Based on the current growth trajectory and market environment, scenario forecasts for 2026 ARR are as follows:

Scenario	Annualized Growth Rate	2026 Year-End ARR Forecast	Core Assumptions
Conservative Scenario	50%	$360 million	Growth rate slows significantly, competition intensifies
Base Scenario	80%	$430 million	Maintain 60-70% of the current growth rate
Optimistic Scenario	120%	$530 million	Continuous technological leadership, market share expands

: Keling’s revenue will be approximately $140 million in 2025 and $240 million in 2026 [2]
: It is expected that ARR will reach $400 million-$500 million in 2026, but the annualized growth rate may slow from the current 140% to 60-80%

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• Technological leadership still has a 6-12 month window
• The stability of the subscription model supports revenue
• Ecological synergy continues to be unleashed
• There is still broad room for international growth

• Changes in the competitive landscape may compress growth space
• Computing power cost control is a key challenge
• User retention and increased payment depth are core variables

1. Monthly Revenue Growth Rate
   (whether it can maintain above 8-10%)
2. User Retention Rate and Payment Conversion Rate
3. Changes in GPU Utilization
4. Release Rhythm of New Model Versions
5. Trend of Market Share Changes

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[1] Kuaishou Technology Official Press Release - Keling AI’s annualized recurring revenue reached $240 million in December 2025 (https://ir.kuaishou.com/zh-hant/node/11176/pdf)

[2] E-Commerce Pai - Kuaishou Keling AI: December revenue exceeded $20 million, ARR exceeded $240 million (https://www.pai.com.cn/p/01kex2f9eew64g9173j41mbzd3)

[3] Jiemian News - Finally, Keling is included in the three major domestic AI players (https://www.jiemian.com/article/12451662.html)

[4] OFweek - Kuaishou’s AI tool betting on the future, Chinese people haven’t started using it yet (https://m.ofweek.com/ai/2026-01/ART-201700-8420-30678285.html)