Goldman Sachs has dismissed concerns about winner-take-all dynamics in the AI video generation space, arguing that both Kuaishou Technology and ByteDance's competing platforms will benefit from a rapidly expanding market. The investment bank projects the global AI video generation market will surge tenfold from US$3 billion in 2025 to US$290 billion by 2030, with the technology fundamentally reshaping value distribution across the entertainment industry by shifting power toward upstream IP design and distribution platforms.

The assessment comes as ByteDance's Dreamina platform opened its Seedance 2.0 model to the public on February 12, intensifying competition with Kuaishou's Kling 3.0, which launched days earlier on February 5. While some testers have praised Dreamina 2.0 for superior fluidity and multi-scene coherence, Goldman analysts Lincoln Kong, Ronald Keung, and Luqing Zhou emphasized that the market expansion will accommodate multiple leading players rather than consolidating around a single dominant platform.

The analysts highlighted that AI's advancement will transform the entertainment value chain, with higher value accruing to companies controlling intellectual property creation and distribution networks rather than production tools alone. This shift suggests that platforms with established user communities, traffic algorithms, and creative capabilities will capture disproportionate benefits as AI lowers production barriers and floods the market with content.

Goldman tracked Kling's user base and revenue surging since late December, with January monthly revenue growing at least 30% to 50%, positioning the platform for a strong start to 2026 and creating upside risk to the firm's $280 million full-year revenue forecast.

Technical Capabilities and Market Positioning

Both platforms have achieved significant breakthroughs in audio-visual consistency, video length extension to 15 seconds, and narrative control, according to Goldman's analysis. Kling 3.0's suite includes Kling Video 3.0, Kling Video 3.0 Omni, Kling Image 3.0, and Kling Image 3.0 Omni, featuring native multilingual and dialect audio generation, extended video duration, multi-shot narrative capabilities, text preservation within images, and cinema-grade realistic output.

The Kling Video 3.0 Omni variant offers advanced generation based on reference videos, capable of replicating subjects' visual and audio characteristics while supporting multi-shot storyboard production. Goldman noted that Kling 3.0 maintains competitive advantages in cinematic detail quality and pricing, consistently ranking among top global models in third-party benchmarks.

Dreamina 2.0, which entered closed testing on February 6 before its public launch, has drawn praise on social media for its understanding of physical laws, natural motion fluidity, and photorealistic human rendering. The model can generate complete long-form videos from single prompts, incorporating multiple clips, scenes, camera angles, and emotional pacing. Its "omnidirectional reference" function supports multimodal inputs including images, audio, and video for more precise control.

Goldman identified distinct strategic positioning between the platforms. Kling 3.0 primarily targets enterprise and professional users with overseas market penetration as a core priority, enabling Kuaishou to expand its user base with positive gross margins. Dreamina 2.0 simultaneously addresses consumer markets with greater emphasis on entertainment applications. On pricing, Kling 3.0 has increased rates compared to its previous O1 and 2.6 Motion Control versions but maintains clear price advantages versus overseas competitors.

Market Expansion Supports Multiple Leaders

Goldman's analysts argued it remains premature to declare winners in the AI video generation and application market, and even if winners emerge, multiple companies will likely succeed rather than a single dominant player capturing the entire market.

The tenfold market expansion over five years will be driven primarily by surging AI penetration and adoption rates in advertising video production and entertainment content creation, including short films, micro-dramas, and film and television production. Qualitative leaps in model capabilities and paradigm shifts in video production workflows will accelerate this process, with the expanding market benefiting leading models including Kling.

According to third-party benchmarks such as Artificial Analysis, Kling maintains top-tier model capabilities in the global market. Goldman's tracking of Sensor Tower data revealed substantial jumps in Kling's user numbers and revenue since late December 2025, with January monthly revenue increasing at least 30% to 50%, suggesting a strong opening to 2026 with upside risk to the $280 million full-year revenue projection.

The analysts emphasized that the market's rapid growth trajectory provides sufficient room for multiple sophisticated platforms to coexist and prosper, contradicting zero-sum competitive assumptions.

Entertainment Value Chain Transformation

The release of Dreamina 2.0 has sparked broader market attention regarding AI's impact across entertainment sectors including long and short video, gaming, music, and advertising. Goldman believes enhanced multimodal AI capabilities will dramatically lower video creation barriers, generating nearly unlimited content supply over the medium term.

While AI tools enable individuals to realize creative visions more easily, product quality and the ability to develop differentiated intellectual property and design concepts remain critical differentiators. For distribution platforms such as video and music streaming services or gaming distribution centers, Goldman considers it too early to fully assess the impact.

However, distribution platforms' existing user communities, user insights, and traffic and algorithm advantages remain key competitive factors. Consequently, as Dreamina and other AI models mature, Goldman expects industry value chains to shift upstream, with IP and creative design alongside distribution platforms commanding higher value-add.

This dynamic means that while AI tools lower production barriers, companies possessing premium IP, creative design capabilities, and robust distribution networks will occupy more advantageous positions in the new value distribution framework. The transformation suggests that content creation at scale becomes commoditized while strategic control over what gets created and how it reaches audiences becomes increasingly valuable.