Alibaba-backed startup launches real-time AI video tool, challenging OpenAI's Sora on cost and speed

In a bold move to revolutionize video creation, PixVerse, a startup backed by Alibaba, has launched an innovative AI tool that enables users to engage with video content in real-time. This cutting-edge platform allows individuals to direct the flow of a video as it is being produced, granting them the power to make characters dance, cry, or strike poses instantaneously. Co-founder Jaden Xie emphasized the transformative potential of this technology during a recent interview. He described how it could pave the way for new business models, enabling users to shape narratives in micro-dramas or partake in endlessly evolving video games free from traditional constraints. Founded in 2023, PixVerse has already raised over $60 million, primarily led by Alibaba and supported by Antler. Xie revealed that the startup is nearing the completion of another funding round, although he did not disclose the specifics. Notably, more than half of the investors are from international backgrounds. PixVerse's latest offering underscores the competitive landscape of AI video tools, particularly among Chinese firms. According to AI benchmarking firm Artificial Analysis, most of the leading AI video generation models are developed by Chinese companies, with many providing quicker processing times and more affordable usage fees compared to OpenAI's Sora 2 Pro. OpenAI's Sora gained international attention about two years ago for its text-to-video capabilities but only became publicly accessible in December 2024. By that point, several Chinese startups had already introduced rival tools to the global market. Wei Sun, a principal analyst at Counterpoint, noted that while Sora maintains high-quality standards, it is limited by generation speed and cost, creating an opportunity for Chinese counterparts to deliver scalable, cost-effective solutions. Beijing-based Shengshu recently showcased its TurboDiffusion video framework, which can produce videos 100 to 200 times faster with little to no loss in quality. PixVerse aims to eliminate waiting times completely, integrating its AI tools within a social media-like platform that has already attracted over 16 million monthly active users as of October. This real-time video generation approach is set to transform user interactions with AI-generated content. Xie aims to increase registered users to 200 million in the first half of the year, up from 100 million last August, and plans to expand the team to nearly 200 employees by year-end. Primarily catering to users outside of China through its web and mobile interfaces, PixVerse stands out in the AI video landscape. Alyssa Lee, chief of staff at DataHub, remarked that many U.S. offerings appear simpler and less nuanced compared to their Chinese counterparts. Scenario-specific AI video tools could provide clearer monetization opportunities, placing traditional giants like Adobe under pressure. PixVerse reported an estimated annual recurring revenue of $40 million as of October, while competitors like Kling, developed by TikTok rival Kuaishou, reported nearly $100 million in revenue for the first three quarters of 2025. For now, Xie indicated that PixVerse is prioritizing technological advancement over immediate commercialization and possesses enough funding to sustain its operations for the next decade. While acknowledging concerns about the quality of AI-generated content, often labeled as 'slop', Xie likened the current phase to the early days of computer graphics, expressing confidence that quality will improve as the technology evolves.