ByteDance is best known globally as the company behind TikTok, but it is also a major AI player in the world's second largest economy.

Its new video creation model, called Seedance 2.0, has been launched in a limited test mode in China -- but hyper-realistic synthetic footage is already flooding social networks worldwide.

Swiss-based consultancy CTOL Digital Solutions hailed it as "the most advanced AI video generation model available... surpassing OpenAI's Sora 2 and Google's Veo 3.1 in practical testing".

It "represents a fundamental shift in video generation capabilities -- not merely in visual quality, but in automating editorial judgment previously exclusive to trained professionals", it said.

The hype drove up shares in Chinese entertainment and gaming firms on Monday, including a 20 percent jump for publisher COL Group and 10 percent for Shanghai Film Co, according to Bloomberg News.

Long blockbuster-style fantasy fight scenes and swooping zoom-in shots showing detailed surfaces were among the clips posted online by users.

Some compared them to the output of OpenAI's Sora 2 text-to-video app, which last year sparked copyright concerns over its depiction of characters from famous cartoons and games such as South Park and Pokemon.

"This category is moving incredibly fast. And China seems to be ahead," commented Inaki Berenguer of venture capital firm LifeX.

"It's incredible what you can create with just prompts (scenes, multi-shots, sound effects, voices...)" he said, referring to the Seedance videos.

ByteDance recently avoided TikTok being banned over national security concerns in the United States, where the app has 200 million users.

Just over two weeks ago, TikTok announced it had established a majority American-owned joint venture to operate its US business.

ByteDance has retained a 19.9 percent stake in the joint venture, keeping its ownership below the 20 percent threshold stipulated by law.

Three investors -- Silver Lake, Oracle and Abu Dhabi-based AI investment fund MGX -- each hold 15 percent stakes.

Oracle's executive chairman Larry Ellison is a longtime ally of US President Donald Trump.

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