From Kuaishou to iQiyi, Chinese tech firms see stronger profits as they tout potential of generative AI
Chinese technology companies got back on track for growth in the second quarter, as they continue to pin high hopes on generative artificial intelligence (AI) services amid uncertainties in the macro environment.
Short-video app operator Kuaishou Technology on Tuesday posted quarterly revenue of 27.7 billion yuan (US$3.8 billion), up 27.9 per cent from the same period in 2022. The increase was primarily attributed to growth of its online marketing services, live-streaming and e-commerce business, the company said.
Profit reached 1.48 billion yuan, compared with a 3.18 billion loss in the June quarter last year, marking the company's "first-ever group-level net profit in a quarter since our listing on the [Hong Kong] stock exchange in 2021", Kuaishou said in its earnings report.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
Like other Chinese Big Tech companies from Tencent Holdings to Baidu, Kuaishou is betting on advances in AI technology to improve its services. The company is set to join the sector's heated competition with the release of its own large language model KwaiYii this month.
Cheng Yixiao, chief executive of Kuaishou, said in the post-earnings conference call that the company has begun an internal test of its chatbot 'Kuaishou AI conversation' in Kuaishou's Android app, calling it the "first intelligent conversation product based on large language models in the short-video and live-streaming industry".
Cheng expects KwaiYii to facilitate users in generating text, images, audio and videos during the content creation process, and help the company understand its users and make better recommendations.
Generative AI has become a popular pitch among China's tech executives, as they try to convince investors about their growth potential under an uncertain economic environment.
Gong Yu, chief executive of video-streaming giant iQiyi, said in a post-earnings call on Tuesday that the company had been using generative AI to improve the quality of scripts and the assessment process of online shows. The technology also helped generate advertising ideas, he said.
"We have been applying generative AI in content production, marketing and user interaction, and received encouraging initial results," Gong said.
iQiyi, majority-owned by search giant Baidu, reported a 17 per cent jump in second-quarter revenue to 7.8 billion yuan, driven by growth in subscription and advertising. Net income reached 365.2 million yuan, compared to a net loss of 214 million yuan in the same period last year.
The Netflix-style streaming platform posted its first quarterly profit in a decade in the March quarter last year following steep job cuts and cost control on content spending, but it swung back to losses in face of economic headwinds before managing to stay profitable for three consecutive quarters.
iQiyi's rival Bilibili also reported better results in the June quarter, posting an 8 per cent growth in sales to 5.3 billion yuan on the back of its strengthening advertising business. Losses narrowed by 23 per cent from a year ago to 1.5 billion yuan.
In a call with analysts, Bilibili chief executive Chen Rui described AI generated content (AIGC) as a revolutionary technology that could improve the company's video and anime content. He added that the company had applied AIGC in various scenarios, including voice generation for virtual idols and content moderation.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2023. South China Morning Post Publishers Ltd. All rights reserved.
