Chinese selfie app giant Meitu says new photo and video editing tools powered by artificial intelligence (AI) helped the company triple its profits last year.

This result is in stark contrast to many other companies struggling to monetize the technology through their own AI initiatives.

Meitu, a Hong Kong-listed company, estimated last year's net profit to be between 330 million yuan and 370 million yuan ($46.36 million and $51.98 million), up more than 200% from 2022's net profit of 111 million yuan.

051db70f b47c 40a3 94e9 6fe2aebdb9d0 439ee945.jpeg
Meitu launched in Hong Kong in 2016 following the global success of its app that lets people edit their selfies by removing blemishes, enlarging their eyes or making their faces and bodies look slimmer.

The surge in profits was driven by AI-based productivity and imaging tools including Action, which lets users create videos, and X-Design, a platform that lets users design graphics for product and service posters.

According to Meitu, both of those tools “exceeded expectations” in terms of user growth and subscription conversion.

Meitu's success in monetizing generative AI tools comes as big tech companies in China and elsewhere struggle to turn a profit, while continuing to invest massive amounts of capital in this market segment.

Microsoft, Google and AMD, three US Big Tech companies that are trying to incorporate AI into their products, have all seen their stock values ​​decline as investors want to see tangible results from these AI efforts.

Companies continue to face challenges in monetizing AI initiatives, according to Kenneth Fong, head of China Internet research at Swiss investment bank UBS. He said it is “not easy” to convince Chinese consumers to pay for software and for businesses to adopt the solutions as they seek to cut costs in a tough economy.

Lessons in AI application and development

Meitu also said it made significant progress in its global expansion last year, with a presence in 195 countries and regions. The company also noted that it saw “rapid growth” in its subscriber base outside mainland China last year.

Founded in 2008 in Xiamen, a city in southeastern Fujian province, Meitu announced a major move into general AI last June when it launched a series of new AI tools for images and videos, as well as the latest version of MiracleVision, its self-developed large AI vision model.

Wu Xinhong, the company's founder, attributed the results to internal efforts that included embedding AI tools into employee workflows and training programs to help workers better understand the technology.

Meitu's groundbreaking AI push appears to have boosted investor confidence in the company as its shares jumped more than 7% last week after it announced its 2023 earnings guidance.

(According to SCMP)

AI fever pushes Meta and Microsoft's capitalization to soar For the first time since 2021, Meta (Facebook's parent company) surpassed the one trillion USD capitalization milestone.