Kling AI secures $2.8 billion funding from Tencent as Kuaishou spins off AI video unit

Kuaishou shares fall after Tencent joins $2.8 billion raise for Kling AI subsidiary

Kuaishou Technology shares were trading lower Friday after the company announced a capital injection of almost $2.8 billion for its artificial intelligence subsidiary, Kling AI, including backing from tech giant Tencent. The Beijing-based short video platform disclosed the funding details in a regulatory filing released after the market closed on Thursday. The company was targeting a valuation of $15 billion from the raise, Bloomberg reported. Kuaishou shares rose more than 5% at Friday's Hong Kong market open but later dropped into negative territory, trading 0.1% lower. Tencent, which owns the generative AI platform Hunyuan, a domestic rival to Kling AI, is investing $200m as part of the funding round, which raised a total of 19 billion yuan ($2.79 billion). The deal will dilute Kuaishou's stake to 68%. Beyond Tencent, the funding round drew a broad consortium of backers, including 21 independent investors. CNBC previously reported on the hype and intense competition surrounding China-based AI video generators, with Kling AI increasingly targeting growth outside its home market Kling AI serves as a core creator studio offering AI-driven features and claims to reach more than 60 million creators globally after launching in June 2024. Kuaishou is China's second most popular short-video platform, with a reported 700 million monthly active users spending more than 130 minutes per day with its services.

Kling AI raises two billion dollars as Kuaishou spins off its video AI unit

Kling AI has raised two billion dollars from venture investors as Kuaishou spins off its AI video unit ahead of a planned IPO. Kling AI, the video generation unit of Chinese tech company Kuaishou, has raised an initial two billion dollars in venture capital funding, the company said on Thursday. Further investors could still join the round, potentially pushing the total to roughly three billion dollars and diluting Kuaishou's stake to about 68 percent, according to Kuaishou's statement. The company's pre-money valuation was about 15 billion dollars, Bloomberg reported, citing the filing. The round marks Kling's first outside funding since Kuaishou began exploring a spinoff earlier this year, and it lands at a lower valuation than the 18 to 20 billion dollars that had been discussed in earlier negotiations. The South China Morning Post reported that Tencent is among the investors in the round, which values the company at roughly 18 billion dollars on a post-money basis. Kuaishou had previously said its board was evaluating a restructuring plan for Kling's assets, and The Information has reported an IPO is being targeted for 2027. Kling generates videos and short films from text prompts, a category that OpenAI effectively abandoned when it shut down Sora in March after the tool failed to retain users and burned through roughly one million dollars per day in compute costs. Kling competes with ByteDance's Seedance and the startup Shengshu in delivering clips for professional filmmakers, advertisers, and creative studios, and it is moving to fill the global void that Sora's departure created. The business has been growing rapidly. Kling's annual recurring revenue reached roughly 500 million dollars in March, up from 300 million dollars in January, a surge driven by the launch of the third-generation Kling model, according to Bloomberg. First quarter revenue topped 650 million yuan, equivalent to about 96 million dollars, more than triple the figure from a year earlier. The raise is part of a broader wave of Chinese AI companies pulling in large rounds as Beijing pushes to keep its champions funded domestically. Whether Kling can sustain its growth trajectory long enough to justify a listing at these valuations will depend on whether the professional video market it is targeting proves durable, or whether AI-generated video follows the same pattern of initial excitement and rapid user attrition that killed Sora.

Alibaba, Tencent and Baidu Join $2.8 Billion Funding Round for Kling AI

Analysts at Citi said the valuation was not unexpected, but they described the investor list as "impressive." They added that market attention would now shift to Kling AI's next product upgrade. The quote reflects interest in whether Kling AI can keep growing after the latest funding round. The company has gained traction in AI video at a time when several global players are adjusting their strategies. Kling AI's backers are entering a market that still faces high compute costs. systems need large amounts of processing power, which can raise expenses as user demand grows. However, Kling AI benefits from its link to Kuaishou's video platform. That connection may help with user reach, product testing, and content use cases inside China. Kuaishou has not confirmed a firm timetable for any listing of Kling AI. Recent reports have said the company could start a Hong Kong listing process within twelve months, with future funding aimed at computing power and data center needs. For now, the deal shows that Chinese technology groups are willing to fund AI video businesses with visible revenue growth. Kling AI's next stage will depend on user demand, product upgrades, and how the company manages the cost of generating video at scale.

Kuaishou shares hit over one-week high after Kling AI secures $2 billion funding By Investing.com

Investing.com--Hong Kong-listed shares of Kuaishou Technology (HK:1024) climbed to an over one-week high on Thursday after its spun-off artificial intelligence unit, Kling AI, secured an initial $2 billion in venture capital funding to fuel its expansion. At 22:11 ET (02:11 GMT), shares rose more than 6% to their highest level since June 23, outperforming a 1.7% gain in Hong Kong's broader Hang Seng. Track AI winners with InvestingPro's real-time news and analyst insights The fundraising values Kling AI at about $18 billion before the latest capital injection. The round could eventually expand to around $3 billion if additional investors join, reducing Kuaishou's stake to about 68%, according to a company statement. Prior to the latest fundraising, Kling AI was valued at roughly $15 billion. Kuaishou had previously said it was evaluating a proposal to restructure Kling AI by introducing external investors, adding that discussions remained at an early stage and no definitive agreements had been signed. The startup develops generative artificial intelligence software that creates videos and short films from text prompts. It competes with rivals including ByteDance's Seedance and startup Shengshu as Chinese AI companies race to capture growing demand for AI-generated video content from filmmakers, advertisers and enterprise customers worldwide. Kling AI has been one of Kuaishou's fastest-growing businesses. Its annual recurring revenue rose to about $500 million in March from $300 million in January following the launch of Kling 3.0. The unit generated more than 650 million yuan ($96 million) in first-quarter revenue, up more than 300% from a year earlier. The fresh funding is expected to support Kling AI's continued product development and overseas expansion as competition in the AI video-generation market intensifies.

Kling Raises $2 Billion Amid Planned Spinoff From Kuaishou

Kuaishou Technology's Kling has raised around $2 billion from investors, as the short-video company seeks to spin off and list its artificial-intelligence video unit. Venture capitalists and other investors have injected 13.82 billion yuan, or $2.04 billion, into Kling, Kuaishou said late Thursday. Additional investors could still join this funding round, potentially taking the total investment as much as $3 billion, it added. Kuaishou's stake in Kling could fall to as low as 68.33% after the capital injection. The company plans to restructure the AI video unit, which could involve spinning it off and listing it in Hong Kong, people familiar with the matter said in May. The latest funding round, which has boosted Kling's valuation to $18 billion, is led by CPE, Guofang Investment, BlueFive, Tencent and Citic Securities, the company said. Amid intensifying competition in China's short-video industry, particularly from bigger rival and TikTok parent ByteDance, investors have been closely watching Kling, which has become an increasingly important part of Kuaishou's business but remains at an early stage of monetization. Kling has gained popularity thanks to its frequent product updates and affordable pricing. It has developed a series of AI models used to produce movies, ads and social-media content, competing with video-generation tools offered by Google, New York-based Runway AI and ByteDance.