ChatGPT might have answers to your everyday questions, but Soulgate Inc. thinks it's cracked something more valuable: understanding what makes people tick emotionally. The company, which operates China's Soul App social platform, is taking another swing at going public with a fresh Hong Kong IPO application filed on November 27.

This isn't Soul's first rodeo. The company initially tried to list in the U.S. in 2021, withdrew that application a year later, then pivoted to Hong Kong with an application in June 2022 that eventually expired. Third time's the charm, perhaps, especially when you're riding into one of Hong Kong's hottest IPO markets in years.

The AI Edge That Matters

Here's where Soul's story gets interesting. While seemingly every company in the current Hong Kong IPO pipeline claims to use AI for something or other (many dubiously), Soul was discussing its AI algorithm integration in its 2022 Hong Kong application, a full six months before ChatGPT launched and sparked the current frenzy. In December 2023, the company rolled out Soul X, its proprietary emotional intelligence large language model, giving it a legitimate head start in figuring out how to actually monetize AI.

Backed by internet giant Tencent (TCEHY), Soul's business centers on connecting people based on shared interests rather than surface-level attributes. In Soul's universe, everyone interacts through avatars, stripping away real-world identity baggage to foster connections based on personality and interests. The platform specifically targets Gen Z users, who represented more than 78.7% of its user base.

Soul X is trained on the company's extensive user data pool, sourced compliantly from the platform's dynamic public spaces like Soul Square. According to the company, the model "possesses multi-modal perception and real-time interactive capabilities, focusing on breakthroughs in emotional perception and empathetic companionship."

The Rare AI Profit Story

What sets Soul apart from the AI crowd is something most AI-centric companies can only dream about: actual profitability. The company has been in the black since 2023, reporting adjusted profits of 337.3 million yuan ($47.7 million) in 2024 and 286.4 million yuan in the first eight months of 2025. Its gross margins came in at healthy levels of 83.7% and 81.5% for those periods, respectively. This is remarkable considering the massive costs typically associated with developing and maintaining AI models.

Revenue has been climbing steadily too, up 19.7% from 1.85 billion yuan in 2023 to 2.21 billion yuan in 2024, with another 17.8% year-on-year increase in the first eight months of 2025 to 1.68 billion yuan. The company has monetized primarily through what it calls emotional value goods and services, selling virtual items and membership privileges to its users.

Part of a Bigger Movement

Soul sits at the forefront of a broader trend where user-generated content platforms are learning to leverage AI, and AI operators are discovering the value of massive user data pools. Snapchat (SNAP) recently jumped into this race, securing a $400 million payment agreement from Perplexity in November for AI search integration. The message is clear: in the current AI era, a massive engaged audience can be a more immediate and monetizable asset than the technology itself.

The rising monetization of AI shows up in recent quarterly results across the tech sector. Kuaishou (KUASF)'s AI-driven marketing and video model helped boost revenue, while Tencent saw a 21% surge in marketing services income from improved AI targeting.

From Matchmaker to AI Powerhouse

Soul App started in 2017 with a focused mission: helping users meet others with similar interests and worldviews using a self-developed AI-powered recommendation algorithm. The company says it has been "systematically exploring the deep integration of AI and social scenarios" since 2020, with this long-term investment culminating in the 2023 launch of Soul X.

The platform now runs around 11 million daily active users (DAU) based on data from the first eight months of 2025. Soul X uses multi-modal perception to understand user preferences at a granular level, recommending like-minded connections and relevant communities including content feeds, interest groups, and audio party rooms.

The model powers features like "Chat Spark," which offers potential conversation starters and replies during one-on-one chats, and "AI Inspiration," which helps refine and format posts. With long-term memory and contextual awareness, these tools aim to enhance social connectivity and engagement, positioning Soul's AI-driven communities as prime spaces for emotional consumption.

The Revenue Machine

AI-powered emotional value services account for more than 90% of Soul's revenue. These include virtual products purchased using the platform's social currency called Soul Coins, such as avatars, virtual gifts, props, and recommendation privileges. According to Chief Technology Officer Tao Ming, "When AI is fully integrated into our social networks, this new AI-driven productivity will transform everyday life – from socializing to digital living and consumption. It will create new markets, like 'emotional value-to-price consumption,' and lead to entirely new products and business models for the social industry."

Soul argues that high user engagement is creating a virtuous cycle, driving improvements to its AI models and algorithms, which in turn enable smarter applications and expand its digital community. These advances enhance user experience while opening new commercialization opportunities in areas like advertising and intellectual property, creating what the company calls a self-reinforcing "user-AI-platform" cycle.

The Valuation Question

At the end of the day, Soul's combination of genuine AI pedigree and actual profitability may help it command a valuation premium when it finally goes public. Its proprietary AI models appear well positioned to attract a growing audience of Gen Z users increasingly seeking more satisfying emotional connections and immersive interactive experiences. In a market saturated with questionable AI claims, Soul's early adoption and demonstrated ability to turn AI into profits could be the differentiator investors are looking for.