Kuaishou accelerates AI transformation: dual enhancement of user ecosystem and advertising monetization, Keling shows huge growth potential.
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With its left hand, Kuaishou pioneers a multi-billion dollar SaaS market through Kling AI, and with its right hand, uses AI algorithms to dig deeper into the core value of its advertising inventory.
While the market is still debating whether large AI models are just “money pits” or “valuation bubbles,” Kuaishou Technology has shown investors how AI can shift from being a cost center to a revenue generator.
On November 27, according to Zhuifeng Trading Desk, Goldman Sachs released a research report after in-depth discussions with Kuaishou’s CFO and investor relations team, clearly stating that AI is substantively driving efficiency improvements in Kuaishou’s traffic, advertising, and e-commerce businesses:
- Its video generation model "Kling" is rapidly evolving into a B-end productivity tool with annual revenue of several hundred million dollars;
- AI algorithms have contributed a real 4-5% growth to the core advertising business.
Kling AI: From “Novelty Tool” to “Productivity Engine”
As Kuaishou’s killer app in the AIGC field, Kling AI is undergoing a key turning point from user accumulation to business monetization.
Goldman Sachs expects Kling AI's single-quarter revenue to surpass $45 million in Q4 2025, and projects its total annual revenue to reach $343 million by 2027.
This expected growth is backed by a qualitative change in the user structure.
Management has disclosed that Kling AI is now clearly positioned as a “professional content creation tool.” In Q3 2025, the user structure underwent significant optimization: The ratio of professional consumers to business users shifted from 7:3 in Q2 to 6:4. This means that Kling is evolving from a C-end ‘novelty toy’ to a B-end ‘productivity tool’.
Currently, Kling has integrated about 10,000 B-end clients via API agreements, covering comprehensive tool platforms like Freepik, 4A advertising agencies, and game studios. Compared to C-end users, B-end clients’ high retention and paying capabilities provide Kuaishou with a steeper growth trajectory.
Meanwhile, the cost-side moat is widening. The newest Kling 2.5 Turbo model has significantly reduced video generation costs while maintaining high performance.
Under the strategy of “improving efficiency and lowering costs,” even though Kuaishou recently expanded its user base through price reductions, the increased frequency of user activity has effectively offset price impact; currently, ARPU (average revenue per user) for P-end users remains steady at $20–$30 per month.
Goldman Sachs also points out that, considering the global base of about 200 million professional video creators, the current single-digit paid penetration rate represents a huge growth vacuum.
Core Business Reshaped by AI: The Invisible “Efficiency Revolution”
If Kling AI is Kuaishou’s “second growth curve,” then AI’s transformation of its core business is a more subtle but lucrative “base business bonus.”
The report mentions that Kuaishou has applied its AI-driven recommendation system OneRec to 25%-30% of its traffic distribution. This tech upgrade has delivered immediate results: Both video views and user time spent increased by at least 1%. For a platform with hundreds of millions of daily active users, a 1% marginal increase translates to tremendous commercial value.
More direct gains are seen on the advertising side. Through A/B testing estimates, the application of OneRec technology brought Kuaishou’s advertising business an incremental growth of 4-5% in Q3 2025. In addition, the application of OneSearch technology in e-commerce has also effectively improved GMV conversion efficiency.
Management admits that although the direct benefit of AI in C-end scenarios is currently limited (general users still prefer the realism and emotional connection of human-performed content), AI has already become the key engine for improving ROI in back-end traffic matching and ad distribution.
Stock Mining: Traditional Metrics Still Have Room for Growth
Beyond its “internal skill” of AI-powered efficiency, Kuaishou’s traditional core indicators still have significant room for growth.
Ad load rate is a key measure of traffic monetization capability. Currently, Kuaishou’s ad load rate is around 9%, compared to Douyin’s 14-15% in the same industry, there’s a notable gap.
Management has stated clearly that the short-term goal is to push the ad load rate above 9%. The drivers are mainly twofold: first, using AIGC to improve native ad content quality, so ads appear more like content rather than interruptions; second, continuous algorithm optimization. In verticals like short dramas, novels, mini-games, and local dining services, ad demand is surging.
Structurally in e-commerce, Kuaishou is speeding up the expansion of its "shelf-based" segment. Currently, shelf-based e-commerce accounts for roughly 30% of GMV, and management aims for a target above 40%.
By adding more livestream links, hot sales charts, and a richer supply of standardized goods, Kuaishou is working to build a more stable shelf-based e-commerce growth curve alongside livestream e-commerce.
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