iQiyi launches massive AI overhaul, expects AI to create most content within five years

iQiyi Bets Future on AI-Generated Content

iQiyi, often dubbed China's Netflix, is launching the most significant corporate overhaul in its 16-year history with a bold prediction: AI will create most of its films and shows within five years 1

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. Founder and CEO Gong Yu announced at the company's annual content showcase in Beijing that the Chinese streaming service plans to transform its video app and website into a social media destination hosting primarily AI-generated content 5

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. This strategic pivot comes as iQiyi faces mounting pressure from declining viewership and an estimated 13% revenue slump in the first quarter 1

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The company officially debuted Nadou Pro on Monday, an AI toolkit designed to handle nearly every aspect of filmmaking from scriptwriting and storyboards to final video rendering 2

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. "It's once in a decade," Gong told the audience of producers and directors. "We have to take the tide as it comes" 3

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Nadou Pro Powers AI Filmmaking Ambitions

The Nadou Pro suite relies on AI models from competitors including Alibaba Group Holding Ltd., ByteDance, and Kuaishou Technology for its domestic version, while an international version will leverage Google Veo 3.1 5

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. iQiyi is betting its deep ties to professional filmmakers will create a more seamless, industry-specific workflow for AI content production 1

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The Beijing-based company is flooding its platform with AI-generated titles, starting with a debut slate of 16 Nadou-produced films spanning sci-fi and anime 1

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. iQiyi aims to release a commercially successful AI-generated film as soon as this summer 4

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. The Nadou suite also features an IP library, allowing content creators to tap iQiyi's catalog of virtual assets and signed talent to generate new content 5

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Financial Incentives to Drive AI Content Creators

To incentivize AI content creators, iQiyi plans to pay producers using its AI toolkit an additional 20% cut of advertising and membership fees, Gong said 1

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. The company will also roll out a standalone app letting users interact with characters from its shows in short clips, designed to capture the mass-market appeal of OpenAI's now-defunct Sora video generator 3

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Gong pledged to maintain investment in professionally produced content but acknowledged that traditional shows will decrease as a proportion of iQiyi's service over time 1

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. A portion of the company's capital will be reallocated to bolster iQiyi's AI services in the short term 5

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Sales Slump Drives Aggressive AI Pivot

The aggressive push into AI reflects iQiyi's struggle against short-video platforms like ByteDance's Douyin, which have fragmented Chinese audiences more than in the US market 1

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. iQiyi, Alibaba, and Tencent Holdings Ltd. together dominate video streaming in China, but the rise of short-form content has triggered a years-long sales slump for traditional platforms 5

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Gong sees China's film industry trapped in a cycle where ballooning production costs and investment risks are stifling output just as users migrate to rival entertainment formats 5

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. He believes AI will break this stagnation by powering a surge in new content while reducing production costs. "I'm confident this is the right call -- we'll have our answer in a year's time," Gong said 5

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Hollywood Watches as AI Debate Intensifies

iQiyi's moves coincide with an AI debate raging in Hollywood, which is grappling with widespread layoffs and questions over how the technology will reshape the industry 5

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. From Netflix to Amazon.com Inc., major studios are increasingly experimenting with AI technology to cut production costs and improve workflows. Amazon has created an in-house team to deploy AI across its film and TV work 1

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However, concerns about an AI bubble persist. Some observers question whether AI-generated content can achieve commercial success beyond short-form viral videos 4

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. Sora, OpenAI's video generation tool that sparked internet fascination with AI content, was reportedly losing over $1 million per day before shutting down last month 3

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. An NBC News poll from last month found roughly half of respondents had negative feelings toward AI 2

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To offset financial pressure, iQiyi is also pivoting toward high-growth niches and physical entertainment. Overseas membership revenue surged more than 30% last year, though it remains a small fraction of the company's total revenue 1

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. The company has also opened an indoor theme park in Yangzhou and filed for a Hong Kong listing last month 5

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