Alibaba-backed PixVerse launches real-time AI video tool

BEIJING — One AlibabaA Google-backed startup is pushing artificial intelligence toward real-time, interactive video creation.

PixVerse released an AI tool on Tuesday that lets users control how a video plays out as it’s generated. And just like a movie director, users can ask characters to cry, dance, or pose, with the actions occurring instantly as the video continues.

Real-time AI video generation can create “new business models,” co-founder Jaden Xie told CNBC in an interview translated from Chinese. Possibilities, he said, include a world in which users could influence the unfolding of a micro-drama, or play an “infinite” video game that would not be limited by preconceived plots.

Founded in 2023, PixVerse raised more than $60 million in the fall, with Alibaba leading the round and Antler participating.

Xie said the company was close to finalizing another round of funding, without disclosing the amount. More than half of the participating investors come from abroad, he said.

PixVerse’s latest AI tool shows how China-based teams are giving their competitors a run for their money with AI-generated video tools.

With the exception of Israeli startup Lightricks, the top eight AI video generation models tracked by AI benchmarking company Artificial Analysis are Chinese companies. Many offer faster generation speeds and much lower usage fees than OpenAI’s advanced, high-end video AI model, Sora 2 Pro.

OpenAI’s Sora first attracted global attention almost two years ago when it demonstrated a new text generation model on video, but it wasn’t made public until December 2024. By that time, several Chinese teams had already offered competing tools to users around the world.

“Sora still sets the quality ceiling in video generation, but it is limited by generation time and API cost,” said Wei Sun, principal analyst at market research firm Counterpoint, referring to how users are charged to access AI models.

“Chinese players are taking a different path. They are transforming video generation into a scalable, low-cost, high-throughput production tool.”

Last month, Beijing-based startup Shengshu said its TurboDiffusion video framework, developed with researchers at Tsinghua University, could create videos 100 to 200 times faster with minimal quality loss.

PixVerse’s latest AI tool has removed most of the waiting time and aims to be more than just a special effect. Its tools are integrated into the company’s social media-style sharing platform, which surpassed 16 million monthly active users in October.

Real-time video generation eliminates the gap between content creation and distribution, Xie said, reshaping the way users interact with AI-generated content.

Xie aims to reach 200 million registered users in the first half of this year, up from 100 million in August, and roughly double the team to nearly 200 employees by the end of the year.

PixVerse primarily serves users outside of China through a web browser interface and smartphone app.

Compared to Chinese-made AI video tools, “most U.S. products are relatively simplistic and minimal” in terms of user interface and experience, said Alyssa Lee, chief of staff at DataHub and former vice president at Bessemer Venture Partners.

Lee said scenario-specific AI video tools offer clearer monetization paths and highlighted Adobe as a traditional software vendor facing pressures. Adobe, long a standard for video and design software, has seen its stock stagnate in recent months, she said, suggesting that its “all-in-one creative suite is vulnerable to being unbundled by all these AI creative marketing tools.”

PixVerse estimated its annual recurring revenue at $40 million in October.

It’s not the only one that generates revenue.

Kling, an AI video tool developed by rival TikTok Kuaishoureported revenue of nearly $100 million in the first three quarters of 2025, based on CNBC calculations from public disclosures.

For now, Xie said PixVerse is prioritizing technology development over commercialization and claimed the company has enough funding to operate for a decade.

Addressing concerns about low-quality AI-generated content, often referred to as “slop,” Xie compared the current stage of development to the early years of infographics, saying that quality improves as the technology matures.

“At the beginning there will be good and bad [content]but gradually, the fittest will surely survive… and then some people will improve technology and truly meet human needs in terms of emotional and spiritual value.