HANGZHOU, China — Chinese, like their peers elsewhere, are getting more and more of their news via videos. At the same time, the country’s news organizations are under increasing financial pressure as advertisers shift their purchasing to top online platforms like those of Tencent Holdings.

Based in the historic eastern city of Hangzhou, four-year-old Xinhua Zhiyun Technologies has developed a solution for the country’s news providers: an automated system powered by artificial intelligence to generate video news clips and known as Media Brain.

Xinhua Zhiyun is hardly a struggling startup. The company’s ultimate controlling shareholder is none other than state media group Xinhua News Agency. Just behind it on Xinhua Zhiyun’s share register, with just over one-third ownership, is Alibaba Group Holding, which also has its headquarters in Hangzhou.

It is a powerful combination given that websites and apps in China are often told to rely on Xinhua reports when offering news while Alibaba has been one of the country’s leading developers and investors in AI technologies.

“Presenting news through disruptive artificial intelligence technology is our competitive edge,” Ye Jian, Xinhua Zhiyun’s director of branding and communication told Nikkei Asia in a recent interview.

Demonstrating, he played a two-minute video from Xinhua’s mobile app featuring an virtual newscaster, backed up by animated graphics, music and photos, reporting on China’s new five-year development plan.

“Moving forward, China will enter new type of development model with the confidence arising from relentless effort to empower the country through science and technology,” the avatar said.

Reports like hers can be prepared by Media Brain in 15 seconds. Such speed is an advantage given that 873 million Chinese watched online video clips last year, according to the official China Internet Network Information Center.

Said Ye, “AI functions such as speech recognition are able to transcribe and digitalize speeches. The system will detect which part of the speech is important or worth highlighting through signs including handclaps.”

Spokespeople for Alibaba, which has been under heavy regulatory pressure in recent months, declined to discuss Xinhua Zhiyun.

The venture, though, is known to tap Alibaba’s AI, machine learning and big data expertise via the e-commerce group’s cloud computing platform. In a post on Alibaba Cloud’s website, machine learning researcher Lin Wei said Alibaba’s system can extract and combine key segments of videos for further processing using image recognition and target detection technologies, which he called “highly complex tasks.”

China has been an enthusiastic adopter of AI, deploying the technology for remote medical evaluations and in courts to evaluate evidence and guide judges toward consistency in their judgments.

Within the news industry, ByteDance’s Jinri Toutiao app, the company’s biggest hit before TikTok and Chinese counterpart Douyin, grabbed attention by using AI to surface articles closely pegged to users’ tastes. Sogou, the country’s second biggest search company, last month launched an AI-powered animated anchor to deliver news by Chinese sign language.

Outside China, major media companies like Thomson Reuters have also been starting to work with AI, for example to automatically generate articles on company earnings. Top executives of Reuters, as well as those of rivals Associated Press and Agence France-Presse, have visited Xinhua headquarters to discuss technological cooperation and its achievements with projects like Xinhua Zhiyun.

Xinhua Zhiyun has around 900 corporate customers including provincial publications such as Zhejiang Daily and Xinjiang Daily.

Rather than Media Brain, some of customers, such as state conglomerate CITIC Group and the Pavilion of Prince Teng tourist site in Nanchang, have turned to Xinhua Zhiyun for a robot it rents which creates downloadable souvenir video clips putting users into a memorable scene. Others use the company’s service for analyzing data on natural disasters.

“Our customers are on the rise,” Ye said. “They are mainly official media organizations but there are many private entities who are our potential customers,” noting that a Hong Kong conference organizer had leased the robot last year.

Xinhua Zhiyun’s robot, seen here in the historic eastern city of Linhai, creates downloadable souvenir video clips putting users into a memorable scene. (Courtesy Xinhua Zhiyun)

According to a filing by Xinhuanet.com, the Shanghai-listed operator of the new agency’s website and parent of Xinhua Zhiyun, the joint venture generated revenue last year of 87 million yuan ($13.66 million), up 74% from a year before, while its net loss quintupled to 37 million yuan.

Xinhuanet.com values the venture, which has 380 staff, at 2.4 billion yuan on its books. It recently sold 6% of its original 51% stake to Chinese Universe Publishing and Media Group, another state-owned company.

Ye said that reporters should not fear being made obsolete by systems like Media Brian.

“It is just standardizing some trivial processes, freeing up resources so that reporters can focus on field reporting,” he said.

“Originally, to produce a piece of news, reporters may spend 70% of time in the field and 30% in the newsroom,” Ye said. “But with the technology, we may raise that to a ratio of 80/20 or even 90/10. We hope to improve not only the quality of content for users, but also its efficiency and quantity.”

Zhang Xinzhi, a journalism professor at Hong Kong Baptist University who organized student workshops with Xinhua Zhiyun on applying AI to news production, agreed that the technology is a benefit for reporters.

“It automates some tasks and relieves human power from mundane works in content production, such as sorting and classifying raw footage and other multimedia materials,” he said. “This is an important step because machines are good at handling repeated, time-consuming and labor-intensive duties whereas human editors can consider more creative tasks.”

A reporter for the local newspaper Yangzhou Daily said she is comfortable with websites using services like Media Brain. “For resource-constrained media companies, an AI host can be a competent 24-hour employee.”

Others are warier of such developments.

“Media companies should invest in good journalism instead of technology,” said Zhang Lifen, a professor of journalism at Fudan University in Shanghai. “I think China needs to invest more on the human side of journalism because technology will not enable people to answer questions.”