BUSINESS

In Depth: China’s Tech Titans Tussle in AI Video Gold Rush

Published: Apr. 24, 2026 4:22 p.m. GMT+8

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Generative video is emerging as a rare, revenue-generating bright spot in the industry, yet the breakneck speed of commercialization has come with a wave of IP and content safety challenges.

A costly chatbot subsidy war dominated China’s artificial intelligence (AI) industry in February. AI agents were all the rage in March. By April, the spotlight had shifted again — this time to AI-generated video, where competition has intensified across nearly every layer of the tech and content ecosystem.

What sets this phase apart is not just technological progress, but commercialization. In China, AI video is emerging as one of the few generative applications with a viable way to generate revenue, supported by strong user demand and a vast content market.

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Explore the story in 30 seconds

China’s AI video sector boomed in 2026 with ~10 models launched since Jan, including Kuaishou’s Kling update, ByteDance’s Seedance 2.0, Kunlun’s SkyReels V4, Alibaba’s HappyHorse 1.0.
Kuaishou’s Kling earned >1B yuan ($147M) in 2025; ByteDance Doubao reached 120T daily tokens; 2B AI videos created in 2025.
Challenges: copyright disputes (e.g., Dilraba Dilmurat case), regulations removed 37K clips/3.4K accounts, content safety issues.

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Explore the story in 3 minutes

1. China's AI industry shifted from chatbot subsidies in February [para. 1], AI agents in March [para. 1], to intense competition in AI-generated video by April across the tech and content ecosystem [para. 1]. This phase emphasizes commercialization, with AI video offering viable revenue due to strong demand and a vast market [para. 2].

2. Companies from model developers to game studios and advertisers are entering, facing challenges like copyright disputes, safety risks, and regulation [para. 3]. Globally, it tests generative video sustainability, potentially favoring China amid Western resistance [para. 4].

3. Competition exploded: nearly 10 video models launched worldwide since January, mostly in China [para. 6]. Kuaishou updated Kling on Feb. 5 [para. 7]; ByteDance's Seedance 2.0 soon after gained popularity for dynamic movement [para. 7]. Kunlun's SkyReels V4 topped benchmarks in March [para. 8]; Alibaba's HappyHorse 1.0 launched early April [para. 8].

4. Platforms and gamers joined: Bilibili's Updream beta [para. 9], iQiyi's AI for producers [para. 9], Tencent's video-to-3D and text-to-game world tools [para. 9]. Mihoyo's co-founder launched U.S. startup for real-time singing characters [para. 10].

5. Use cases span ads, e-commerce demos, entertainment shorts [para. 11]. ByteDance's Doubao hit 120 trillion daily tokens by March, doubled in 3 months, driven by video/agents [para. 12]. 2025 saw >2B AI clips, 14x YoY increase [para. 13]; Douyin projects $36B global enterprise market by 2030 [para. 13].

6. Strategies diverge amid surging demand [para. 15]. Kuaishou's Kling earned >1B yuan ($147M) in 2025 from millions of users/thousands clients [para. 16], expects doubling in 2026 despite immaturity [para. 17]. Seedance 2.0 priced at 13.8 yuan/15s clip (~1 yuan/s), higher than rivals amid waits [para. 18]; seller's market with min spends [para. 19].

7. Monetization: developers sell API access, users buy credits, clouds charge compute [para. 20]. Alibaba's HappyHorse free/open-source for marketing, but unsustainable [para. 21]; targets $100B cloud/AI revenue in 5 years via token/model-as-service reorganization [para. 22].

8. Challenges mount: realistic video sparks likeness/IP disputes [para. 25]. Beijing court ruled for actress Dilraba Dilmurat [para. 26]. Platforms actioned hundreds of works [para. 27]; ByteDance halted Seedance features/overseas rollout after Hollywood IP backlash [para. 28]. Volcano Engine built copyright system [para. 29].

9. Regulation tightens: March mandate for AI labels; 6 platforms removed 37,000+ clips, 3,400+ accounts [para. 30]. Campaign axed ~29,000 videos on sensitive themes [para. 31]. LiblibAI fixed porn filter gaps [para. 32].

(Word count: 498)

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Who’s Who

Kuaishou Technology: Kuaishou Technology, a leader in China's AI video field, updated its Kling model on Feb. 5. Kling generated over 1 billion yuan ($147M) in 2025 revenue from tens of millions of users and thousands of enterprise clients. The company expects AI video revenue to double in 2026, amid heavy investments.

ByteDance Ltd.: ByteDance Ltd. released Seedance 2.0, surpassing Kuaishou's Kling in popularity with dynamic camera movement. Its Doubao LLM hit 120 trillion daily tokens, driven by AI video. Seedance charges 13.8 yuan per 15s clip in a seller's market. Faced Hollywood backlash over IP, paused overseas rollout. Owns Douyin and Volcano Engine. (62 words)

Kunlun Tech Co. Ltd.: Kunlun Tech Co. Ltd. released its video generation model SkyReels V4 in late February, topping rankings by Artificial Analysis for text-to-video with audio in mid-March.

Alibaba Group Holding Ltd.: Alibaba Group Holding Ltd. released its text-to-video model, HappyHorse 1.0, in early April. The open-source, free model is a marketing strategy, deemed unsustainable long-term by an Alibaba Cloud executive. The company targets $100 billion annual revenue for cloud and AI over five years, reorganizing around token-based monetization and model-as-a-service.

Bilibili Inc.: **Bilibili Inc.** began beta testing its AI video tool **Updream** in March, entering the competitive AI video generation space alongside model developers and other platforms. (28 words)

iQiyi Inc.: iQiyi Inc. launched an AI agent platform targeting professional film and television producers.

Tencent Games: Tencent Games unveiled an AI tool that converts video into game-ready 3D animation and later introduced a model capable of generating 3D game worlds from text prompts.

Mihoyo Co. Ltd.: Cai Haoyu, co-founder of Mihoyo Co. Ltd. (developer of Genshin Impact), launched a U.S.-based startup releasing an AI model that generates real-time virtual characters with lifelike expressions, capable of speaking and singing.

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