iQiyi's Financial Struggles Amid Streaming Wars

The numbers tell a sobering story: iQiyi's non-GAAP operating profit collapsed to just 640 million yuan ($89 million) in 2025 - a staggering 70% drop from the previous year. Total revenue dipped 6.6% to 27.29 billion yuan ($3.8 billion), despite a modest 2.7% fourth-quarter rebound that offered a glimmer of hope.

What's dragging iQiyi down? Analysts point to two main culprits:

• Relentless pressure from short video platforms like Douyin (China's TikTok)
• A saturated membership market struggling to find new growth avenues

Gong Yu's High-Stakes Tech Gamble

Facing these headwinds, founder Gong Yu isn't doubling down on traditional strategies. Instead, he's making bold predictions about AI revolutionizing content creation within "2-3 years." The company is already testing this vision:

AI Production Push: iQiyi aims to break free from expensive traditional production models by leveraging artificial intelligence across its pipeline.

Decentralization Strategy: The platform plans to shift toward more open, distributed content creation - moving away from heavy self-production investments.

Overseas Bright Spot: Early results show promise abroad, where membership revenue grew over 30% year-on-year thanks partly to AI-enhanced localization efforts.

The Long Road Ahead

While AI shows potential for streamlining operations and creating derivative content, it hasn't yet become a major profit driver. All eyes now turn to iQiyi's April "World Conference," where the company must convince investors its tech transformation can deliver real financial results.

The streaming wars have entered a dangerous phase for traditional players. As Gong Yu himself might say: innovate or face extinction.

Key Points:

• 70% profit drop signals deep challenges for China's streaming pioneer
• AI and decentralization form core of turnaround strategy
• Overseas growth offers rare bright spot amid domestic struggles
• April conference becomes make-or-break moment for tech vision