Kingsoft Cloud is finally losing less money, and the timing lines up almost perfectly with new leadership at the top.
The company’s first half of 2026 report, released last week, shows revenue climbing 33.7% year-over-year to 5.78 billion yuan, or about $858 million. Meanwhile, its net loss narrowed by 43.4% to 437 million yuan. Quarter over quarter, the improvement looks even sharper: revenue rose 13.7% from the first quarter to the second, while the loss shrank by 72% over that same stretch, close enough to breakeven that it’s now a real possibility for the second half of the year.
This is the first full report under CEO Zou Tao since he took over as chairman in March, following Xiaomi founder Lei Jun’s resignation from the role. Zou isn’t new to the company, though. He joined nearly three decades ago, back in 1998, and has spent the past four years since becoming CEO steadily cutting Kingsoft Cloud’s low-margin content delivery business in favor of AI cloud services. That bet is paying off: intelligent computing cloud revenue nearly doubled year-over-year in the fourth quarter of last year and grew another 90% in the first quarter of this one, now accounting for more than half of the company’s total public cloud revenue.
Even so, the AI cloud business comes with real costs attached. Kingsoft Cloud’s capital expenditures and leased assets totaled 6.24 billion yuan in the first half of the year, up 26% from the same period last year, while depreciation and amortization costs nearly doubled to 1.78 billion yuan.
For context, rivals Alibaba and Tencent are spending tens of billions of yuan per quarter on similar infrastructure, and they can absorb that scale far more easily than a company with a market cap under HK$30 billion and less than $1 billion in cash.
There’s also a dependency question hanging over the numbers. Roughly 30% of Kingsoft Cloud’s revenue over the past three quarters has come from affiliated companies Xiaomi and Kingsoft Corp, meaning any slowdown at either one could hit the bottom line directly.
Perhaps the bigger issue, though, is where Kingsoft Cloud actually sits in China’s AI cloud market. Omdia ranked Alibaba Cloud first with 38.1% market share last year, followed by Volcano Engine, Baidu Cloud, Tencent Cloud, and Tianyi Cloud. Kingsoft Cloud didn’t crack the top five, leaving it in a second tier where costs run higher as a share of revenue and competing for new business only gets harder.
