Recently, Wenxuan Group and other leading content platforms such as Chinese Online have successively launched full-stack AI short drama production tools. These tools achieve end-to-end automation from script generation, character design, storyboard drawing to video synthesis, greatly reducing the production threshold and cycle. Industry estimates that the output of AI short dramas will experience an exponential growth in 2026, driving high-quality short dramas with 3D features, high consistency, and strong storytelling to become the mainstream.
The core breakthroughs of these new-generation tools lie in solving long-standing industry issues such as "character breakdown" and "style drift." By binding IP character settings and visual style libraries, AI systems can maintain a highly consistent character image, tone, and even micro-expressions across multiple episodes and scenarios. Meanwhile, their dynamic narrative engine can automatically adjust the rhythm of shots, camera movements, and music emotions based on plot tension, significantly enhancing the immersive viewing experience. More notably, AI is becoming a key hub for cross-media IP transformation— a web novel can quickly generate multiple versions of short dramas suitable for platforms like Douyin, TikTok, and YouTube Shorts, achieving "one source, multiple uses, global distribution."
TikTok's high-incentive policies have further accelerated this trend. Its traffic support and cash reward mechanisms for high-quality AI short dramas not only attract a large number of creators but also speed up the global export of localized content. In this context, platform enterprises with rich IP reserves and AI engineering capabilities have become the main beneficiaries.
From an investment perspective, the market is focusing on six key stocks:
- Tencent Holdings (the parent company of Wenxuan, with significant ecological synergy advantages)
- Wenxuan Group (driven by a massive web novel IP portfolio and AI animation technology)
- Chinese Online (the "Chinese Xiao Yao" AI short drama platform has already been implemented)
- Zhiyu Technology (initial signs of an IP + reading + short drama closed loop)
- Kunlun Wanwei (self-developed large model empowers AIGC content production)
- Huanrui Century (great potential in combining film and TV IPs with AI production)
However, risks coexist amid the frenzy. Intensifying homogenized competition, fluctuations in AI-generated quality, high ad spending costs, and underwhelming user payment conversion rates remain to be addressed. Industry consensus holds that future winners will be those companies that can efficiently produce content while establishing brand barriers through high-quality IPs and refined production.