Chinese media companies AI integration strategy

Chinese media companies, specifically iQIYI and NetEase, are shifting their business models toward deep artificial intelligence integration and decentralized content ecosystems.

Financial reports from iQIYI indicate a strategic transformation aimed at integrating AI into production and distribution to increase profitability and user engagement. This follows a period of narrowing operating losses and growth in content distribution revenue.

Both iQIYI and NetEase are prioritizing AI to lower technical barriers for creators. NetEase is launching ‘Bee AI’ to facilitate interactive content creation through simple prompts, while iQIYI has announced an ‘All in AI’ strategy to empower live-action filming and long-form AI-generated content. These moves are part of a broader transition toward decentralized social media models that empower a larger influx of creators to monetize content directly.

In the second quarter of 2026, iQIYI reported a net loss of approximately 36.8 million euros, more than doubling from 17.1 million euros the previous year, while quarterly revenue fell by 5 percent to 805 million euros. To combat rising costs, CEO Gong Yu is pivoting toward AI-generated content, claiming that fully AI-generated films can reduce production costs and time by ‘70 to 90 percent’ by replacing traditional filming locations, crews, and post-production processes.

As part of this pivot, China’s first AI-generated feature film with a regular broadcast license premiered on July 23, 2026. Additionally, sixteen other AI-generated mid-length dramas are currently in the company’s program. Despite the net loss, iQIYI reported improved non-GAAP operating results and an operating net cash flow of 340 million RMB.