Amidst swirling rumors that its flagship video generative model, 'Kling AI,' might be spun off as an independent entity, Kuaishou finally broke its silence.

An official announcement confirmed that the company is assessing the restructuring of businesses related to 'Kling' and considering external financing options. However, it quickly clarified that discussions are 'still in the preliminary stages, and no definitive agreement has been reached.' This non-committal stance aptly mirrors the deep-seated concerns Kuaishou harbors regarding capital management: it urgently requires a fresh narrative to solidify its market standing.

Indeed, as it steps into 2026, Kuaishou finds itself in a starkly bifurcated state.

On one hand, there are commendable accomplishments. In 2025, its annual revenue surpassed the 140 billion yuan threshold, with net profit growing steadily. Its self-developed 'Kling' also emerged as a dark horse in the AI landscape, delivering impressive commercialization results.

On the other hand, it grapples with an overwhelming 'high-pressure zone.' Early in the year, it faced a record 1.4 billion yuan in fines, top influencers were banned, and there was frequent turnover among key business executives.

Amidst the challenges of rebuilding compliance and accelerating AI adoption, how can Kuaishou strike a balance for sustainable growth?

Steady Growth and the Limits of the 'Laotie Dividend'

In 2025, Kuaishou delivered a seemingly stable financial performance.

The financial results revealed total revenue of 142.776 billion yuan for the year, marking a 12.5% year-on-year increase. Adjusted net profit reached 20.647 billion yuan, up 16.5% year-on-year, with an adjusted net profit margin of 14.5%, an increase of 0.5 percentage points from the previous year, indicating improved profitability.

On the surface, Kuaishou continues to be profitable—and even more so. In the fourth quarter of 2025, total revenue reached 39.568 billion yuan, up 11.8% year-on-year, surpassing market expectations and maintaining profitable growth for several consecutive quarters.

However, a closer look at the business structure reveals issues within its traditional operations that can no longer be overlooked.

In the fourth quarter of 2025, revenue from the live streaming business was only 9.655 billion yuan, down 1.9% year-on-year. Full-year live streaming revenue reached 39.087 billion yuan, up just 5.5% year-on-year, with growth lagging far behind other businesses and even becoming the sole negative-growth segment among core businesses in certain quarters.

Most critically, user growth has reached a plateau.

In 2025, Kuaishou's average daily active users (DAU) reached 410 million, up 2.76% year-on-year. Average monthly active users (MAU) reached 725 million, up 2.11% year-on-year. Over a longer period, from 2021 to 2025, DAU growth slowed from 15.58% to 2.76%, while MAU growth declined from 12.68% to 2.11%, nearly coming to a standstill.

This indicates that the era of relying on 'Laotie culture' and show-based live streaming for growth has ended, with user ceilings and market saturation becoming Kuaishou's new reality.

Executive Reshuffles Reflect 'E-commerce Anxiety'

Faced with stagnant growth in core businesses, Kuaishou recently underwent a significant organizational reshuffle.

Multiple sources indicate that Kong Hui, who replaced departing executive Ding Yuqing as head of e-commerce in February, was reassigned to the commercialization division after about three months, with e-commerce now directly overseen by Kuaishou Senior Vice President Wang Jianwei. Meanwhile, the live streaming business also saw a new leader in Zhang Yifan.

Behind these personnel changes lies management's deep-seated anxiety over e-commerce performance.

In 2025, Kuaishou's e-commerce Gross Merchandise Volume (GMV) remained at 1.6 trillion yuan, up 15% year-on-year, but GMV growth in the fourth quarter slowed to 12.9%.

Historical data reveals a deceleration trend: 78% in 2021, 33% in 2022, 31% in 2023, and 17% in 2024.

More concerning for capital markets was Kuaishou's announcement in its latest earnings report that it would cease disclosing GMV data separately starting in the first quarter of 2026—a move widely interpreted as management's lack of confidence in future GMV growth.

Against this backdrop, bringing back a core executive who previously led Spring Festival red envelope campaigns and main-site product ecosystems to the e-commerce frontlines reflects Kuaishou's deeper strategic considerations.

Strategically, Kuaishou's main-site traffic and AI capabilities are key variables for breakthroughs. Wang Jianwei's deep understanding of platform monetization and merchant ecosystems will significantly facilitate the integration of main-site traffic with e-commerce pathways—leveraging the main site's massive public domain traffic to fuel e-commerce and using AI to optimize recommendation algorithms and search experiences.

Clearly, Kuaishou is attempting to build a 'traffic + technology' dual-drive model to find a second growth curve for e-commerce.

Zhang Yifan, who now oversees live streaming, is another seasoned business manager groomed internally at Kuaishou.

Live streaming is Kuaishou's foundational strength and its proud 'private domain moat.' Zhang has long delved deep into the intersection of live streaming and e-commerce, familiar with the underlying logic of Kuaishou's 'Laotie economy.' He successfully drove the integration of live streaming with short videos, the mall, search, and other scenarios, effectively increasing the proportion of omnichannel GMV.

By entrusting him with live streaming, Kuaishou aims to further activate its content ecosystem. Future live streaming will no longer be limited to a single tipping model but will fully transition toward 'pan-lifestyle' scenarios deeply integrated with short videos and the mall.

Radical Compliance Overhaul Following Hefty Fines

At the internet's gaming table, traffic was once Kuaishou's sole creed. But in the face of severe compliance crises, no traffic is immune.

Within a single month, Kuaishou received cumulative fines of approximately 146 million yuan from the State Administration for Market Regulation (SAMR) and the Beijing Cyberspace Administration for e-commerce violations and a surge of pornographic and low-brow live streaming content on its platform.

First, its e-commerce entity was fined approximately 26.69 million yuan by SAMR for multiple violations. Shortly after, on February 6, the Beijing Cyberspace Administration issued a staggering 119.1 million yuan fine for previous live streaming obscenity incidents.

Notably, the '12·22' cyberattack caused live streaming content to spiral out of control. Around 10 PM that night, Kuaishou's live streaming channels were suddenly overwhelmed by a tidal wave of pornographic and violent content, exposing technical defense weaknesses and triggering severe regulatory accountability over platform responsibilities.

Facing public outrage and regulatory crackdowns, Kuaishou realized that under compliance red lines, any hint of complacency is fatal. Recently, the platform has demonstrated a rare 'iron-fisted' resolve in governance.

This year, Kuaishou has taken strict actions, disposing of over 18,000 gambling-related non-compliant live streaming rooms, banning over 11,000 traffic-diverting accounts, and even imposing 'indefinite live streaming bans' on more than 2,000 accounts.

Moreover, no tolerance is shown even for top influencers with tens of millions of followers. Recently, prominent creator 'Ye Baili' was severely banned for using minors inappropriately and producing low-brow content. Meanwhile, amid rising AI fraud, Kuaishou released a community governance report disclosing that it blocked over 100,000 AI-generated fake videos annually.

Forced to shift from a 'traffic-first' approach to 'safety and development in tandem,' Kuaishou's strategic pivot is painful. In the short term, iron-fisted governance will inevitably sacrifice some user activity and even disrupt vested interests. But this is a necessary lesson for Kuaishou to mature as an internet platform.

Can AI Fuel Kuaishou's 'Second Curve'?

In the era of intense competition in short videos, with traditional businesses under pressure and compliance costs rising, Kuaishou is undergoing a profound strategic breakthrough.

Faced with this dilemma, Kuaishou's management logic is clear: fortify safety baselines through strict internal governance while activating inventory efficiency in e-commerce and live streaming through executive reshuffles.

Simultaneously, it is going all-in on AI technology, aiming to deeply integrate it into short drama industrialization, e-commerce merchant content production, virtual human live streaming, and other sectors to create a new growth engine.

Over the past year, Kling AI has demonstrated an astonishing growth trajectory. In 2025, its quarterly revenues reached 150 million yuan, 250 million yuan, 300 million yuan, and 340 million yuan, respectively, totaling approximately 1.04 billion yuan for the year. More impressively, in December 2025, Kling AI's monthly revenue surpassed $20 million and continued to soar.

According to The Information, citing insiders, in the first quarter of 2026, Kling AI's revenue reached a staggering $75 million, with the vast majority coming from overseas markets like North America. This not only proves Kuaishou's technical prowess in foundational visual generation but also validates strong global demand for high-quality AI video tools.

However, when viewed against the group's overall financials, reality appears leaner. In 2025, Kuaishou's total annual revenue reached 142.8 billion yuan, with Kling AI's 1 billion yuan accounting for less than 1%.

Can AI sustain Kuaishou's second curve? The answer: not yet, but its potential commands market attention.

Before Kling truly matures into a towering force, Kuaishou must still rely on its 'old trio' of advertising, live streaming, and e-commerce to stabilize its foundation. But undoubtedly, the AI seed has sprouted, and its explosive growth and global potential are reshaping Kuaishou's future imagination.