Amid rumors that its flagship video-generating model "Kling AI" might go public as a standalone entity, Kuaishou has finally broken its silence.

An official announcement confirmed that the company is considering restructuring its "Kling"-related businesses and seeking external funding. However, it swiftly clarified that the process is "still in its infancy, with no definitive agreements reached yet." This non-committal stance accurately mirrors the deep-seated concerns Kuaishou faces in navigating capital markets: It urgently needs a fresh narrative to solidify its market standing.

Indeed, as 2026 approaches, Kuaishou finds itself in a starkly divided state.

On one front, there are notable achievements. In 2025, its annual revenue surpassed 140 billion yuan, net profit grew steadily, and its self-developed "Kling" emerged as a dark horse in the AI race, delivering impressive commercial results.

On the other hand, it is grappling with immense pressure. Early in the year, it faced a record 1.4 billion yuan in fines, top influencers were banned, and key business executives were frequently reshuffled.

The challenge for Kuaishou lies in striking the right balance between compliance restructuring and AI-driven expansion for sustainable growth.

Steady Growth Amidst Diminishing Returns from the "Old Friends" Dividend

In 2025, Kuaishou's performance appeared stable on the surface.

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

Kuaishou remained 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 profit growth for several consecutive quarters.

However, a closer examination of the business structure reveals underlying issues in 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. Annual live-streaming revenue stood at 39.087 billion yuan, up just 5.5% year-on-year, with growth lagging far behind other businesses and even turning negative in some quarters, making it the only core business to experience decline.

Most critically, user growth has plateaued.

In 2025, Kuaishou's average daily active users (DAU) reached 410 million, up 2.76% year-on-year, while average monthly active users (MAU) stood at 725 million, a slight 2.11% increase. Over a longer period, from 2021 to 2025, DAU growth slowed from 15.58% to 2.76%, and MAU growth from 12.68% to 2.11%, nearly grinding to a halt.

This indicates that the era of relying on "Old Friends" culture and show-based live-streaming for growth is over. User ceilings and market saturation have become the reality Kuaishou must confront.

Executive Reshuffles Reflect "E-commerce Anxiety"

Faced with stagnation in its core businesses, Kuaishou recently underwent a significant organizational reshuffle.

According to multiple sources, Kong Hui, who replaced outgoing executive Ding Yuqing as head of e-commerce in February this year, was reassigned to the commercialization division after about three months, with Kuaishou Senior Vice President Wang Jianwei taking direct charge of e-commerce. Meanwhile, Zhang Yifan assumed the new role of head of live-streaming.

Behind this personnel decision lies management's deep-seated anxiety over e-commerce performance.

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

Historical data reveals a broader slowdown: E-commerce growth peaked at 78% in 2021, fell to 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. This move was widely interpreted as a lack of confidence in future GMV growth.

Against this backdrop, bringing back a core executive who previously led Spring Festival red envelope projects and main-site product ecosystems to the e-commerce frontlines reflects 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 is expected to significantly enhance the integration of main-site traffic with e-commerce, leveraging the platform's massive public-domain traffic to fuel e-commerce growth while 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, now overseeing 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 cultivated the intersection of live-streaming and e-commerce, understanding the underlying logic of Kuaishou's "Old Friends" economy. He successfully integrated live-streaming with short videos, the mall, search, and other scenarios, effectively increasing the proportion of pan-shelf GMV.

By entrusting him with live-streaming, Kuaishou aims to further activate its content ecosystem. Future live-streaming will no longer rely solely on tipping models but will transform into a "pan-lifestyle" scene deeply integrated with short videos and the mall.

"Radical Self-Reform" After Hefty Fines

At the internet poker 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 a combined 1.46 billion yuan in fines from the State Administration for Market Regulation (SAMR) and the Beijing Cyberspace Administration for e-commerce violations and widespread 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. Then, on February 6, the Beijing Cyberspace Administration imposed a staggering 1.191 billion yuan fine for previous live-streaming obscenity incidents.

Notably, the "12·22" black-market attack caused live-streaming content to spiral out of control. Around 10 PM that evening, Kuaishou's live-streaming channels were suddenly overwhelmed by a flood of pornographic and violent content, exposing technical vulnerabilities and triggering severe regulatory backlash over platform accountability.

Facing public outrage and regulatory hammer blows, Kuaishou realized: Under compliance red lines, any hint of complacency is fatal. Recently, the platform has demonstrated rare "iron-fisted" resolve in governance.

This year, Kuaishou has cracked down hard, shutting down over 18,000 gambling-related live-streaming rooms, banning more than 11,000 accounts for traffic diversion, and even imposing "indefinite live-streaming bans" on over 2,000 accounts.

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

Forced to shift from "traffic first" 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 into a responsible internet platform.

Can AI Fuel Kuaishou's "Second Curve"?

In the era of market saturation 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: On one hand, it strengthens safety through strict internal governance and revitalizes e-commerce and live-streaming through executive reshuffles.

On the other hand, it bets heavily on AI technology, aiming to deeply integrate it into short drama industrialization, e-commerce merchant content production, and virtual human live-streaming to create a new growth engine.

Over the past year, Kling AI has demonstrated astonishing growth. 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, Kling AI's revenue reached a staggering $75 million in the first quarter of 2026, with most coming from overseas markets like North America. This not only proves Kuaishou's technical prowess in underlying 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 less rosy. In 2025, Kuaishou's total annual revenue hit 142.8 billion yuan, with Kling AI contributing just under 1%.

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

Before Kling truly matures, Kuaishou must still rely on advertising, live-streaming, and e-commerce—the "old trio"—to stabilize its core business. But undoubtedly, AI has sprouted, and its explosive growth and global potential are reshaping Kuaishou's future imagination.