At first glance, Kuaishou’s Q1 financial results seem to reflect a strong performance for a short video platform.

Total revenue hit RMB 33.7 billion, up 3.4% year-on-year; adjusted net profit reached RMB 3.4 billion; daily active users (DAU) hit 413 million, while monthly active users (MAU) reached 772 million, both setting new records for user scale.

These are solid numbers.

But in my view, the real story in this financial report isn’t about how much traffic remains on Kuaishou’s main platform or how fast its e-commerce business is growing. Instead, it’s about a more critical signal:

Kling AI is now generating revenue.

In Q1, Kling AI’s operating revenue surpassed RMB 650 million, with year-on-year growth exceeding 300%. By March this year, Kling AI’s annualized revenue run rate approached $500 million, compared to just around $100 million in March last year—a fourfold increase in one year.

This is no longer just about ‘Kuaishou talking about AI.’

This is AI already contributing real, measurable revenue to Kuaishou.

In the past, many companies enthusiastically discussed AI, but when you dug into their financial reports, you’d wonder: Where is the AI? How much revenue does it contribute? Is it profitable? No one knew.

This time, Kuaishou has at least answered the first layer of questions: Kling AI isn’t just a PowerPoint slide, a press release, or a decorative term for the capital markets. It’s already a new, growing revenue stream.

This matters a lot for Kuaishou.

Because Kuaishou’s past valuation framework was clear: short video traffic, e-commerce gross merchandise volume (GMV), advertising revenue, and margin improvement.

This framework isn’t without value, but it has its limits. The short video industry is no longer in its early high-growth phase. Competition for user time is fierce, advertiser budgets are increasingly scrutinized, and e-commerce must compete for mindshare with Douyin, Taobao, and Pinduoduo. The market now values Kuaishou more based on ‘platform repair’ and ‘profit release.’

Kling AI’s emergence gives Kuaishou a new valuation language.

It’s no longer just ‘a short video platform with an AI business.’ It could become ‘a short video platform that has grown an AI video production platform.’

These two statements are very different.

The most interesting thing about Kling AI now isn’t that it can generate videos—many models can do that. What truly matters is that Kling 3.0 is moving from ‘generating a single video’ to ‘completing a full creative workflow.’

It supports multimodal inputs and outputs, including text, images, audio, and video, generating videos up to 15 seconds long. It enables shot control, subject consistency, semantic response, and synchronized audio-visual output.

What does this mean?

Previously, AI-generated videos felt more like toys—you input a sentence, get a clip, and could share it on social media or use it for demos, but it was hard to integrate into professional production.

Now, Kling aims for something else: not just helping you create a video, but helping you complete more complex creative tasks.

Characters need to remain consistent, shots need to flow, sounds need to match, plots need to progress, and scenes need to stay stable.

These are what professional content production truly needs.

The use of Kling AI in some virtual scenes and special effects shots in Peaceful Year is a strong signal. It shows that AI-generated videos are already entering more professional content production areas like film and television, short dramas, advertising, and comic adaptations.

In my view, Kling AI’s core value isn’t ‘generating videos’ but driving down the cost curve of video production.

This will, in turn, impact Kuaishou’s main business.

In the past, Kuaishou relied on user-generated content, with the platform handling distribution and monetization. Now, with AI entering content production, creators can make videos cheaper and faster, advertisers can generate materials at lower costs, short drama and comic adaptation teams can iterate faster, and e-commerce merchants can more easily create product videos.

This isn’t just about an independent AI product.

It will affect Kuaishou’s content supply, ad placement, e-commerce conversion, and even overseas content production.

Clues can also be found in the financial report. In Q1, Kuaishou’s online marketing services revenue reached RMB 19.6 billion, up 9.3% year-on-year. The company mentioned that content consumption, lifestyle services, and AI application industries were key drivers of non-e-commerce marketing services revenue growth. Among them, AI reduced production costs and creative barriers for comic adaptations, driving expansion in comic adaptation content supply and releasing related marketing demand.

This statement is worth savoring.

AI isn’t just making money within Kling AI. It’s also feeding back into Kuaishou’s advertising business.

If AI increases content supply, makes ad materials cheaper, improves placement efficiency, and enriches the platform’s commercial inventory, then Kuaishou’s AI isn’t ‘starting from scratch’—it’s entering the main business cycle.

My judgment is that Kuaishou AI’s greatest value now isn’t cost reduction but unlocking a second growth curve while feeding back into the main business.

Cost reduction is just the first layer.

The real imagination lies in: Kuaishou linking AI video generation, content distribution, ad monetization, and e-commerce transactions.

Kling AI helps produce content, the Kuaishou main platform helps distribute it, the ad system helps monetize it, and the e-commerce system helps close transactions.

If this chain works, Kuaishou won’t just be competing with AI video tools like Runway and Pika. It has a content ecosystem, traffic, and monetization scenes.

This is the difference between Kuaishou and pure AI video startups.

Pure tool companies must find their own customers, scenes, and distribution. Kuaishou has an existing ecosystem. Its challenge isn’t finding scenes but truly embedding model capabilities into those scenes.

Of course, we shouldn’t oversell this.

Kling AI is now in the financial realization phase but not yet fully in the profit realization phase.

Video generation is a compute-intensive business. Model training costs money, inference costs money, bandwidth costs money, and the R&D team costs money. Fast revenue growth doesn’t necessarily mean attractive gross margins.

This is the first thing investors must watch: Is Kling AI profitable?

The second thing is revenue quality.

RMB 650 million in revenue is impressive, and an annualized revenue run rate (ARR) approaching $500 million is exciting, but how much comes from C-end subscriptions? Enterprise clients? API calls? Overseas markets? If it’s just from early adopters, sustainability is questionable. If enterprise clients and API usage increase, order visibility strengthens.

The third thing is synergy with Kuaishou’s main platform.

If Kling AI is just selling tools independently, it’s an AI revenue stream. If it can continuously improve ad, e-commerce, short drama, comic adaptation, and overseas business efficiency, it becomes a variable for Kuaishou’s valuation reconstruction.

The fourth thing is competition.

The AI video space is too hot. Overseas, there’s Sora, Runway, Pika, Adobe; domestically, ByteDance, Alibaba, Tencent, MiniMax. No one lacks money or model capabilities. To maintain leadership, Kling AI must keep improving model quality, product experience, monetization, and ecosystem access faster than competitors.

So, how should capital markets re-evaluate Kuaishou?

I think we can’t just view it as a traditional short video platform anymore, but we also can’t immediately value it as an AI unicorn.

A more reasonable framework is: main business cash flow as the foundation, Kling AI providing elasticity.

Kuaishou’s main platform has over 400 million DAU, mature monetization capabilities in advertising, e-commerce, and live streaming, and an adjusted net profit of RMB 3.4 billion—this is the foundation.

Kling AI is a high-growth asset, with Q1 revenue exceeding RMB 650 million and an ARR approaching $500 million—this is the elasticity.

AI feeding back into content production, ad materials, e-commerce videos, and short drama supply—this is the synergy.

If these three things continue, Kuaishou’s valuation logic will shift from ‘platform repair’ to ‘platform cash flow + AI content infrastructure.’

This is the most valuable part of this financial report.

Kuaishou is no longer just saying, ‘We have AI.’ It can now say, ‘AI is generating revenue for us and transforming our content ecosystem.’

This is far more useful than just releasing models.

My conclusion is clear:

Kuaishou’s AI strategy has entered the financial realization phase, not just the valuation narrative phase.

But valuation reconstruction isn’t complete yet.

Because the market won’t just look at Kling AI’s revenue growth next—it will also look at gross margins, retention, enterprise clients, overseas revenue, and real feedback into advertising and e-commerce.

If these metrics perform, Kuaishou won’t just be a short video platform but one of China’s first companies to combine AI video generation, content ecosystem, and commercialization closed loop.

If they don’t, Kling AI might just remain a fast-growing but cost-heavy AI tool.

The difference lies here.

Cheng Yixiao said in the financial report that Kuaishou remained committed to deepening its AI strategy in Q1, driving content ecosystem prosperity and commercial growth through technological innovation, and would continue to deepen the integration of AI technology with business scenarios.

For capital markets, translating this is simple:

Kuaishou AI is already generating revenue. Now it must prove it can generate profits. Kling AI is already a product. Now it must prove it can become a platform. Kuaishou already has AI growth. Now it must prove this growth can support a valuation switch.

This is the real story in this financial report.