Are Digital Humans Starting to Generate Revenue?

Nowadays, digital humans are seamlessly integrating into various facets of human life. Whether it's the e-commerce live streamers we come across daily, the customer service representatives answering our calls, or even the teachers conducting online classes, digital humans are omnipresent.

The founder of one company once set an ambitious goal to deploy 100 million "silicon-based laborers" (digital humans) globally by 2025. This company is none other than UIBI, headquartered in Nanjing and founded by Sima Huapeng.

While the current tally of 80,000 digital humans is a far cry from the 100 million target, UIBI has recently taken a significant step by submitting its prospectus to the Hong Kong Stock Exchange, aiming for a listing on the Hong Kong Main Board. If successful, it will earn the distinction of being the first "digital human stock" in Hong Kong.

01. Market Boom, Yet Profitability Remains a Challenge?

The concept of "digital humans" first captured widespread attention during the 2021 "metaverse" craze. In 2022, the introduction of digital anchors at the Winter Olympics and the release of the film "The Wandering Earth 2" further fueled explosive interest in digital humans. Concurrently, advancements in large language models (NLP) addressed previous capability limitations, propelling rapid growth in the digital human market.

According to iResearch Consulting, the size of China's digital human market surpassed 10 billion yuan in 2023 and is projected to reach 30 billion yuan by 2025, with a compound annual growth rate exceeding 50%.

As one of the earliest domestic companies to venture into the digital human sector, UIBI's business now spans five areas: intelligent voice, digital human video, live streaming, intelligent interaction, and fully automated content production. The company's revenue has surged in tandem with the digital human boom.

From 2023 to the first half of 2025, UIBI's total revenue reached 530 million yuan, 630 million yuan, and 330 million yuan, respectively, with year-over-year growth rates of 137.8%, 18.9%, and 12.6%. The prospectus states that UIBI held a 32.2% market share in China's digital human agent industry in 2024, ranking first domestically and second globally among suppliers.

Its leading market position stems from the synergistic advantages of its technology and commercialization strategies. After the digital human craze took off, many companies began developing "face-sculpting" platforms for consumer and everyday work scenarios. In contrast, UIBI initially focused on B2B clients, tailoring its underlying models and platform products primarily to meet enterprise needs.

The prospectus reveals that UIBI's labor service platform now encompasses multiple customer interfaces, such as the UIBI Voice Platform, UIBI Digital Human Video Platform, and UIBI Digital Human Live Streaming Platform, serving industries like education, media, healthcare, finance, and public services. To date, UIBI has provided over 80,000 "silicon-based laborers" to sectors such as telecommunications and finance.

However, while digital humans represent a burgeoning business, few companies in this space are profitable. Even leading player UIBI has only recently emerged from the red.

From 2022 to 2024, UIBI reported adjusted net losses of 46.22 million yuan, 29.41 million yuan, and 35.24 million yuan, respectively. In the first half of 2025, the company reported an 8.29 million yuan loss based on unaudited financials, but an adjusted net profit of 5.29 million yuan under non-IFRS metrics.

To enhance profitability, UIBI has scaled back its marketing efforts toward small and medium-sized clients in recent years, instead focusing on large enterprises. Consequently, the number of UIBI's clients has dropped by more than half, from 573 to 289.

Despite forging solid partnerships with leading commercial banks and telecom operators, UIBI's gross margin declined from 38.5% in 2022 to 31.6% in the first half of 2025. The prospectus acknowledges that competitive pricing strategies with large clients have contributed to this margin squeeze.

Additionally, UIBI faces escalating risks of uncollectible accounts receivable. Trade receivables surged from 57 million yuan in 2022 to 233 million yuan in 2024, while the collection period extended from 70 to 124 days.

On the flip side, this strategy has increased reliance on major clients. From 2022 to the first half of this year, UIBI's client base shrank from 573 to 289, with revenue from its largest client soaring from 16.6% in 2022 to 64.4% in the first half of 2025. The prospectus identifies the largest client as a leading telecom operator founded in 2004 with 53.2 billion yuan in registered capital, likely China Mobile Communications Co., Ltd.

UIBI acknowledges this issue. The prospectus states that revenue from its largest client is expected to gradually decline by the end of 2025, with plans to further diversify its customer base.

Beyond its B2B operations, UIBI is exploring "clone" products tailored to everyday consumer needs.

Founder Sima Huapeng stated in interviews that the company is in a transitional phase between B2C and B2B. While B2C products "kill time," B2B offerings "save time" for enterprises. In early 2024, UIBI sold nearly 10,000 clones priced at 8,000 yuan each.

02. Tencent as the Largest External Shareholder

Before founding UIBI, Sima Huapeng was a seasoned entrepreneur. In 2002, he co-founded Lanseal and served as CTO, focusing on secure software development. In 2007, he launched Returnil antivirus software in Russia, backed by VTB Bank.

In 2017, Sima officially founded UIBI, securing investments from CMB International, Sequoia China, Qihoo 360, and others within a year. At the time, the digital human market was still in its infancy, with significant technological shortcomings and no economies of scale. Sima noted that even free digital human promotions in 2019 saw little adoption.

Despite limited market acceptance, UIBI has consistently attracted funding. In 2019 and 2020, it received investments from CMB International, Tencent (Linzhi Tencent), Haisong Capital, and other state-owned entities. In the first half of this year, UIBI secured a D-round financing of several hundred million yuan from the Jiaxing High-Tech Zone Industrial Fund, valuing the company at 3.15 billion yuan post-investment.

The prospectus reveals that Tencent, which began investing in UIBI during its Series B round, is now the second-largest shareholder and the largest external shareholder, holding 16.59%. Sima Huapeng and his affiliated entities (Nanjing Guishou, Jiaxing Guiyu) collectively hold approximately 36.82%, forming the single largest shareholder group. CMB International holds 11.81% through various funds, while Guoxin Fund owns 6.74%, Jiaxing High-Tech 6.35%, Haisong Capital 5.89%, Cape of Good Hope 3.48%, Zhongcai Qihoo 3.35%, and Sequoia China 2.97%.

In August, rumors of layoffs surfaced after an internal chat screenshot leaked, but UIBI quickly denied them, stating it maintains a stable R&D and sales team while expanding global recruitment. In 2025, the company plans to focus on Hangzhou, Jiaxing, Hong Kong, and Singapore, creating hundreds of new positions annually, with thousands expected in 2026.

Digital human development demands substantial ongoing investment, and UIBI has relied heavily on external funding. "Quijie Business" notes that UIBI's cash flow improved in the first half of this year, with net current assets increasing from 296 million yuan on December 31, 2024, to 482 million yuan on June 30, 2025, primarily due to external capital inflows and reduced contract liabilities and payables after technological upgrades.

UIBI invests heavily in R&D, with expenses once accounting for 33.8% of revenue, though this figure dropped to around 20.4% in the first half of this year. The company claims to have a proprietary large model but has not fully disclosed core algorithm patent details in its prospectus.

The prospectus states that IPO proceeds will primarily fund R&D enhancement, marketing and promotion, global acquisitions and ecosystem partnerships, and working capital. Whether UIBI can further balance commercialization and R&D investment remains to be seen.

03. The "Dual Sides" of Digital Humans

For digital human companies to achieve rapid expansion and stable profitability, they must rely on the maturation of the industry. While the market holds significant potential and rapid growth, the sector remains in its early stages.

Internet analyst Zhang Shule identifies two main types of digital humans: "puppets" (virtual idols like Hatsune Miku and Luo Tianyi), which require extensive creative input and face high barriers to popularity, and "Pinocchios" (AI-driven entities), which pose significant technical challenges and have limited commercial applications. Neither type has fully unlocked consumer scenarios, demanding long-term investment with slow returns.

The digital humans most commonly encountered by the general public are AI customer service representatives and digital human live streamers, both key product directions for UIBI. However, consumer experiences with these products remain underwhelming.

AI customer service often struggles with user communication. Many netizens complain that China Mobile's AI customer service "doesn't understand human language, is difficult to communicate with, and makes transferring to a human agent nearly impossible."

Digital human live streamers face similar interaction issues. Zhang notes the "uncanny valley" problem: when digital humans appear too humanlike but lack genuine human capabilities, they create a "creepy" visual effect due to their mechanical nature.

Limited by current technology, digital humans cannot yet provide emotional value while answering questions, leaving interaction experiences in need of improvement. For suppliers, this may hinder customer base expansion. Meanwhile, competition in the digital human sector intensifies, with internet giants like Baidu, JD.com, and Alibaba leveraging AI large models and ecosystem advantages, while vertical players build barriers in niche markets. UIBI faces direct industry challenges.

UIBI primarily relies on direct sales for customer acquisition. The prospectus mentions that while client numbers halved in recent years, average customer acquisition costs surged from 74,000 yuan per client in 2022 to 184,000 yuan in 2024.

Digital humans also face regulatory and ethical controversies. Recently, actress Wen Zhengrong publicly accused AI technology of stealing her likeness and voice for live-streaming commerce on short video platforms. Previously, CCTV anchor Li Zimeng and Dr. Zhang Wenhong were also cloned for live-streaming sales, with numerous videos using their images and voices to promote health products. These incidents highlight the legal risks and compliance issues lurking behind the digital human industry's rapid growth.

UIBI's prospectus repeatedly mentions industry-wide compliance risks, stating, "Regardless of whether we or other third parties actually, intentionally, or unintentionally cause defects or misuse of AI technology..."

As an emerging industry, the healthy development of virtual digital humans requires dual support from technological innovation and compliance. Against this backdrop, digital human companies and practitioners must uphold legal and regulatory standards. As a leading player, UIBI must not only achieve breakthroughs in multimodal interaction technologies but also shoulder the responsibility of ensuring business compliance and driving industry progress.