Kuaishou Technology's Virtual Companion Gambit: A Strategic Play in the Metaverse Economy

The metaverse economy is no longer a speculative concept-it's a battleground for tech giants and innovators seeking to redefine digital interaction. Kuaishou Technology, the Chinese short-video behemoth, has positioned itself at the forefront of this evolution with its aggressive foray into the virtual companion market. By leveraging AI-driven tools like Kling AI 2.0 and FantaSay, Kuaishou is not only enhancing user engagement but also unlocking new monetization avenues in a sector poised for explosive growth.

Strategic Initiatives: AI as the Core of Virtual Companions

Kuaishou's entry into the virtual companion space is anchored in its in-house AI development. The launch of FantaSay, an AI companion app tailored for international users, marks a pivotal step in this strategy. Targeted at markets like Brazil-Kuaishou's largest overseas market-FantaSay offers "NSFW" (not safe for work) virtual companions, a niche but lucrative segment of the metaverse economy, as detailed in Kuaishou's Q2 2025 financial results. With 500,000 downloads to date, the app demonstrates the company's ability to localize content and tap into culturally specific demand.

Underpinning these efforts is Kling AI 2.0, a multimodal AI platform that enables users to generate images, videos, and voice content, as discussed in the company's Q1 2025 earnings call. This tool not only empowers creators but also lays the groundwork for personalized virtual companions, which could evolve into full-fledged digital humans. Kuaishou's CEO, Yixiao Cheng, has emphasized that AI integration across the platform-from content creation to customer service-is central to its long-term vision, according to a Third News report.

User Engagement: Scaling the Metaverse Audience

Kuaishou's Q1 2025 results underscore the effectiveness of its AI-driven engagement strategies. The platform reported 408 million daily active users (DAUs) and 711.7 million monthly active users (MAUs), reflecting a 3.6% year-over-year increase - figures highlighted in the Q1 2025 earnings call highlights. These metrics are critical in the metaverse context, where user retention and interaction frequency directly correlate with monetization potential.

The company's focus on lower-tier and international markets further amplifies its reach. By localizing content and forming strategic partnerships in Southeast Asia and Latin America, Kuaishou is creating a global user base that can be seamlessly integrated into its virtual companion ecosystem, as shown in the Q2 2025 financial results. For instance, FantaSay's Portuguese-language marketing in Brazil highlights the company's precision in targeting high-growth regions (Q2 2025 financial results).

Monetization: From E-Commerce to AI-Driven Advertising

Kuaishou's virtual companion strategy is not just about engagement-it's a revenue engine. The company's Q2 2025 financials reveal a 13.1% year-over-year revenue increase to RMB35.0 billion, driven by online marketing services (RMB19.8 billion) and live streaming (RMB10.0 billion) (Q2 2025 financial results). Notably, Kling AI alone generated RMB250 million in Q2, showcasing the direct monetization potential of AI tools (Third News report).

The metaverse economy thrives on immersive experiences, and Kuaishou's AI companions are designed to enhance this. For example, AI-powered digital humans in live streaming have improved conversion rates, contributing to a 14.4% year-over-year rise in live streaming revenue to RMB9.8 billion (Q1 2025 earnings call highlights). Additionally, AI-driven e-commerce tools-such as multi-modal models that optimize product recommendations-boosted gross merchandise value (GMV) by 17.6% year-over-year to RMB358.9 billion (Q2 2025 financial results).

Financial Performance and Investor Confidence

Kuaishou's Q2 results also highlight its profitability. The company reported an adjusted net profit of RMB5.6 billion and a 55.7% gross profit margin, driven by AI efficiencies (Q2 2025 financial results). To reward shareholders, Kuaishou announced its first-ever special dividend of HK$0.46 per share, signaling confidence in its long-term growth trajectory, as noted in the Q2 2025 earnings call.

The Road Ahead: AI as a Metaverse Catalyst

Kuaishou's strategic investments in AI are not just incremental-they are transformative. By embedding large AI models across its platform, the company is creating a self-reinforcing cycle: enhanced user experiences drive engagement, which in turn fuels data generation, further refining AI capabilities (Third News report). This flywheel effect positions Kuaishou to dominate the virtual companion market, where the global metaverse economy is projected to reach $800 billion by 2030, according to a Kuaishou product guide.

Conclusion

Kuaishou Technology's virtual companion initiatives represent a masterclass in leveraging AI to bridge the gap between engagement and monetization. By targeting both domestic and international markets with culturally resonant products, the company is not only scaling its user base but also capturing a slice of the metaverse economy's vast potential. For investors, Kuaishou's strategic clarity, financial discipline, and technological edge make it a compelling bet in the AI-driven metaverse era."""