iQiyi expects AI to create the bulk of its films and shows in five years, and plans to convert its video app and website into more of a social media destination that hosts mainly AI-generated content / Photo: X / IQiyi
Chinese streaming platform iQiyi has come up with a plan to overcome its multiyear sales slump. Within five years, the bulk of its films and TV series will be created using AI, founder and CEO Yu Gong says. That would mark a monumental transformation for the industry and trigger iQiyi’s biggest corporate overhaul since its founding in 2010, Bloomberg writes. Meanwhile, Wall Street sees as much as 950% upside for the stock of "China's Netflix.”
About Qiyi
Yu Gong founded Qiyi – the company was known by that name during its first year of operations before rebranding as iQiyi – in 2010. It aimed to replace pirated video clips with licensed high-definition streaming content, earning it the nickname “China’s Netflix.” Today, it generates revenue from subscriptions, advertising sales, online games, and licensing rights to its original content.
The company received its first $50 million in funding from private equity firm Providence Equity Partners and Chinese tech giant Baidu, which bought out its partner’s stake for an undisclosed sum in 2012.
In early 2016, Gong and Baidu CEO Robin Li attempted to acquire the video-streaming platform from the tech giant for $2.3 billion, but faced criticism from shareholders, who argued Baidu would benefit more by retaining ownership of iQiyi. The partners ultimately withdrew their offer.
Later that year, the Wall Street Journal, citing sources, reported that iQiyi was planning an IPO that could raise up to $1 billion and value the company at $4-5 billion.
The company eventually completed its IPO in 2018, selling 125 million American depositary receipts, with each ADR representing seven shares, at $18 per ADR, raising $2.25 billion excluding the underwriters’ option. Since then, the company has lost 93% of its market capitalization.
In recent years, iQiyi has been grappling with declining sales, Bloomberg wrote. In 2025, the company reported a 7% drop in revenue to RMB27.29 billion ($3.9 billion). In 2024, revenue fell 8% to RMB29.23 billion ($4.0 billion).
Bloomberg attributed the trend to the growing popularity of short-video platforms such as ByteDance’s Douyin.
Context
This year, during iQiyi’s annual content showcase, Gong announced that within five years the bulk of the company’s films and TV series would be created using AI. Bloomberg described the move not only as the beginning of the biggest restructuring in iQiyi’s history, but also as a monumental shift for the industry.
Bloomberg described the company’s planned overhaul as follows: iQiyi intends to transform its video app and website into a kind of social-media platform hosting primarily AI-generated content. Shortly before that, iQiyi unveiled Nadou Pro – a suite of AI agents designed specifically for professional long-form video production.
To showcase Nadou’s capabilities, the company presented a slate of 16 science-fiction and anime films during the conference, Bloomberg wrote. To encourage the creation of more content, iQiyi plans to pay producers an additional 20% cut of advertising and membership revenue, Gong said.
In addition, iQiyi is investing in a new social-video app that is expected to become a kind of equivalent to OpenAI’s Sora video generator, according to Bloomberg. “It’s once in a decade. We have to take the tide as it comes,” the news agency quoted Gong as saying.
He believes China’s film industry is trapped in a vicious cycle in which rising production costs and investment risks are suppressing content output while users migrate to competing entertainment formats. The CEO of the Chinese streaming service believes AI will help overcome the stagnation and trigger a surge in new content creation. “I’m confident this is the right call – we’ll have our answer in a year’s time,” Gong said.
iQiyi is not alone in its ambitions. Major studios – from Netflix to Amazon – are increasingly experimenting with AI technologies to reduce production costs, Bloomberg noted. Amazon has created its own internal team to deploy AI across its film and television projects.
What analysts say
Wall Street views on the stock's prospects are split almost evenly: 12 analysts have a "buy" call on the company’s ADRs, while 11 advise "hold." Just three months ago, sentiment was more pessimistic: 11 analysts had "buy," nine "hold," and two "sell." The average target price stands at $12.60 per ADR, implying upside of 10.5 times versus current levels.
Long-form video continues to lose ground to short-form series, which means iQiyi’s domestic subscription and advertising revenue could remain under pressure, HSBC wrote in a February note seen by Oninvest. That prompted the investment bank to cut its 2026-2027 revenue forecast for the company by 6% and its profit forecast by 19-31%. It also lowered its target price for the company’s ADRs by 5% to $1.90 per unit, while maintaining its “hold” rating.
HSBC said it had factored in the potential impact of AI on lowering content-production costs and boosting future revenue. The bank said iQiyi’s advantage in the global market lies in its content library, including short dramas. That differentiates the company from competitors such as Netflix, which are focused primarily on Western content.
UBS recommends buying iQiyi shares with a target price of $2.50 per ADR. In a note dated March 30 seen by Oninvest, the investment bank described iQiyi as one of China’s largest online-video companies by monthly active-user share and paid-subscriber base. It believes strong demand for content will allow the company to raise subscription prices, which would positively affect revenue. However, if competition intensifies, iQiyi will likely have to increase spending on content production.
