Kuaishou Technology has secured fresh backing for Kling AI, its fast-growing artificial intelligence video unit, as major Chinese technology firms increase exposure to the AI video market. The company said investors including Alibaba, Tencent, and Baidu agreed to inject more than 19 billion yuan, or about $2.8 billion, into Kling AI.
The round values Kling AI at $15 billion before the new capital. After the investment, Kuaishou’s ownership will fall to about 68% from full control. The deal also allows one more investor to join within two months, with total fundraising capped at 20.45 billion yuan.
Kuaishou said the investor group includes some of China’s largest technology and financial names. Alibaba, Tencent and Baidu are among the backers, while other investors are also taking part in the round.
The investment provides Kling AI with additional funding as competition in AI video generation grows. The service creates videos from text prompts and images, placing it in the same market as tools from OpenAI, Google and other AI firms.
Kling AI has become one of China’s most-watched AI video platforms. It started inside Kuaishou, which runs one of the country’s largest short-video apps. Kuaishou later began exploring a restructuring of its AI unit, though the company said in May that talks were still in the early stages.
The fundraising also comes as China’s AI sector continues to attract large amounts of capital. Technology companies in China raised $3.1 billion from stock market listings from the start of the year to mid-June, more than five times the level seen last year.
Kling AI reported 650 million yuan in revenue for the March quarter. That figure was more than four times the level from the same period a year earlier, according to the company’s disclosure.
The revenue growth has helped support investor interest in the business. Kling AI’s annualised run rate reached about $500 million in March, rising from about $300 million in January, according to figures cited in reports.
The funding round places Kling AI’s post-money valuation near $18 billion, based on the size of the investment and the pre-money valuation. The round has been reported as one of the largest recent AI fundraises in China.
Meanwhile, the company may still add another investor before the round reaches its final cap. Kuaishou has said the total fundraising will not exceed 20.45 billion yuan.
Kuaishou shares rose as much as 6.9% on Friday after the fundraising details emerged. The gains later faded, and the stock closed largely unchanged.
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. AI video 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.
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