ByteDance’s new video model sparks rally in China AI app stocks

BYTEDANCE’S latest video generation model triggered gains in shares of Chinese media and artificial-intelligence (AI) application firms, after impressing analysts with the quality of content creation.

Publishing firm COL Group hit the 20 per cent daily upper trading limit, while Shanghai Film and gaming and entertainment firm Perfect World each rose by 10 per cent. The onshore benchmark CSI 300 Index was up 1.4 per cent.    

The rally came after ByteDance, the parent company of video sensation TikTok, launched on Feb 7 its newest iteration AI video creation app Seedance 2.0 that surprised observers with the quality of generated clips. It is the latest example of investor enthusiasm about homegrown AI technologies that powered a bull run in the world’s second-largest stock market last year.  

ByteDance’s new app sparked widespread evaluation and discussion in the industry, possibly marking a “singularity moment” for AI in film and television, Kaiyuan Securities analysts, including Fang Guangzhao, wrote in a note.

“The actual test results are impressive, supporting input such as text, images, videos, and audio, and has made breakthroughs in key capabilities,” they wrote. Companies with intellectual property rights and platform traffic are expected to benefit, they added.

Demand for shares of Chinese firms with killer apps has grown in recent months. Another recent example was Kuaishou Technology’s AI video-generation tool Kling that has gained traction with global users. The app was the top-grossing graphics and design app on iPhones in South Korea and Russia as at Jan 2. BLOOMBERG