Core Viewpoint - After the implementation of the "double reduction" policy in 2021, the education giant Gaotu (GOTU.NYSE) has been seeking a second growth curve, focusing on AI as a key direction for the past two years [3][4]. Group 1: AI Development and Strategy - Gaotu has signed a cooperation agreement with Fudan University to develop a "personalized education large language model agent," focusing on user profiling, personalized lesson generation, and adaptive learning [3][4]. - The AI agent will be applied in one-on-one teaching scenarios to significantly enhance the teaching efficiency of main instructors [4]. - In 2025, Gaotu plans to upgrade its dual-teacher model to a three-teacher model, incorporating AI companions for enhanced learning experiences [5]. Group 2: Product Launches and Market Response - Gaotu launched several AI products in 2024, including the "Yuyin Tata" psychological healing product and the "Gaotu AI English" application for middle and primary school students [4]. - The collaboration with celebrity Wu Yanzu for an online English course generated significant sales, exceeding 5 million yuan within five days of launch [6]. - However, the course faced criticism for Wu's limited appearance and the AI's mechanical feel, raising concerns about the effectiveness of Gaotu's AI products compared to human instructors [6][7]. Group 3: Historical Performance and Financial Challenges - Gaotu experienced explosive revenue growth from 2018 to 2020, with revenue reaching 7.125 billion yuan in 2020, but faced challenges after the "double reduction" policy [9][10]. - The company underwent multiple transformations, including a shift from K12 education to adult education and other sectors, but has struggled to find a unique competitive advantage [10][11]. - In 2024, Gaotu's sales expenses accounted for over 53% of total revenue, reflecting high marketing costs in a competitive adult education market [13][14]. Group 4: Financial Metrics and Losses - Despite significant marketing investments, Gaotu reported a net loss of 10.49 million yuan in 2024, with continuous losses over six consecutive quarters [17][18]. - The company’s sales expenses increased significantly in 2024, with a year-on-year growth of over 97%, indicating a return to a heavy marketing model [16][17].