Despite the significant market attention garnered by the recent launch of ByteDance's Seedance 2.0, Goldman Sachs believes the AI video generation sector is not a "winner-takes-all" zero-sum game. Leading models such as Kuaishou's Kling and ByteDance's Seedance 2.0 are all poised to benefit from the rapidly expanding market, with advancements in AI technology set to reshape the value distribution across the entire entertainment industry.
Following the public release of Seedance 2.0 on February 12, investor focus on the competitive dynamics between the two major platforms intensified. Analysts Lincoln Kong, Ronald Keung, and Luqing Zhou at Goldman Sachs stated in a recent report that Kling 3.0 was upgraded on February 5, launching several days ahead of Seedance 2.0. Both models have achieved major breakthroughs in audio-video synchronization, video duration (15 seconds), and narrative control.
While some testers found Seedance 2.0 superior in terms of fluidity and multi-scene coherence, Goldman Sachs emphasized that Kling 3.0 remains competitive with its cinematic-level detail and pricing advantages, consistently ranking among the world's top models in third-party benchmark tests. More importantly, the firm forecasts that the global AI video generation market will grow tenfold over the next five years, reaching approximately $29 billion by 2030, a market size ample enough to support the coexistence of multiple leading players.
**Kling 3.0 vs. Seedance 2.0: Technical Comparison and Market Positioning**
Goldman Sachs' latest report provides a detailed comparison of the two platforms' technical capabilities and market strategies.
The report states that the Kling 3.0 series includes Kling Video 3.0, Kling Video 3.0 Omni, Kling Image 3.0, and Kling Image 3.0 Omni. Key upgrades comprise native multi-language and dialect audio generation, extended video duration to 15 seconds, multi-shot narrative capability, in-image text retention, and cinema-grade realistic output. Kling Video 3.0 Omni offers advanced generation features based on reference videos, enabling the replication of a subject's visual and auditory characteristics and supporting multi-shot storyboard creation.
In contrast, Seedance 2.0 began closed testing on February 6 before its public release on February 12.
According to Goldman Sachs, based on user feedback on social media, the Seedance 2.0 model excels in understanding physical laws, natural motion fluidity, and "human-like" realism. It can generate complete long-form videos featuring multiple cuts, scenes, camera angles, and emotional pacing from a single prompt. Its "comprehensive reference" function supports multi-modal inputs like images, audio, and video for more precise control.
Goldman Sachs notes that Kling 3.0's strategic positioning primarily targets enterprise and professional users, with overseas market penetration being a core focus. This allows Kuaishou to expand its user base with positive margins. Seedance 2.0, meanwhile, caters to both consumer markets, placing greater emphasis on entertainment needs. Regarding pricing, while Kling 3.0 has seen price increases compared to its previous O1 and 2.6 Motion Control versions, it still maintains a significant price advantage over overseas competitors.
**Video Generation Market Structure: A Non-Zero-Sum Game with Room for Multiple Leaders**
Goldman Sachs believes it is premature to declare winners in the AI video generation/application market, and even if there are "winners," it is likely to be multiple companies rather than a single entity dominating the space.
The firm's analysts project the global AI video generation and editing market will expand rapidly, growing tenfold over the next five years from approximately $3 billion in 2025 to around $29 billion by 2030.
This market expansion is primarily driven by a surge in AI penetration and adoption rates for advertising video and entertainment video production (such as short videos, short dramas, films, and TV series). Qualitative leaps in model capabilities and a paradigm shift within the video production industry will accelerate this process. A larger market pie will benefit leading models, including Kling.
The report points out that, according to third-party benchmarks (such as Artificial Analysis), Kling maintains top-tier model capabilities in the global market. Tracking data from Sensor Tower, Goldman Sachs observed a significant jump in Kling's user numbers and revenue since the end of December last year, with monthly revenue increasing by at least 30% to 50% in January. A strong start to 2026 is anticipated, presenting upside risk to the full-year revenue expectation of $280 million.
**AI Transforms the Entertainment Value Chain: Increased Value for Upstream IP Design and Distribution Platforms**
The release of Seedance 2.0 has sparked market interest in the broader implications for the entertainment industry, spanning long/short-form video, gaming, music, and advertising.
Goldman Sachs posits that improvements in multi-modal AI capabilities will substantially lower the barrier to video creation, leading to an almost unlimited supply of content in the medium term. Although AI tools can help individuals realize their creative ideas more easily, product quality and the ability to develop differentiated IP and design concepts remain crucial.
The impact on distribution platforms, such as video/music streaming services or game distribution hubs, is still too early to assess definitively. However, the inherent advantages of existing user communities, user insights, and traffic/algorithm capabilities of these platforms remain key differentiators.
Consequently, as Seedance and other AI models mature, Goldman Sachs believes the industry value chain will shift upstream. Intellectual property/creative design and distribution platforms are expected to capture higher value.
This implies that while AI tools lower production barriers, companies possessing high-quality IP, creative design capabilities, and robust distribution networks will occupy more favorable positions in the new value distribution.