Summary Alibaba, Tencent and other investors will inject $2.8 billion into Kling AI, valuing Kuaishou’s AI video business at $15 billion.
(Reuters) – Chinese technology company Kuaishou Technology said on Thursday that a group of investors, including Alibaba and Tencent, will invest more than 19 billion yuan ($2.8 billion) in its AI video-generation unit, Kling AI, valuing the business at approximately $15 billion before the new funding.
The fundraising highlights strong investor confidence in China's rapidly expanding artificial intelligence sector, which continues to attract significant capital despite broader economic challenges.
According to Kuaishou, the financing round allows Kling AI to bring in an additional investor over the next two months, with the total fundraising capped at 20.45 billion yuan.
Following the investment, Kuaishou's ownership stake in Kling AI will decrease from 100% to about 68%.
Alongside Alibaba and Tencent, Chinese technology giant Baidu has also agreed to acquire a stake in Kling AI.
The AI video platform generated revenue of 650 million yuan during the March quarter, more than four times higher than the same period last year, reflecting strong demand for AI-powered content creation tools.
Analysts at Citi said the company's $15 billion pre-money valuation was largely in line with expectations but described the lineup of investors as "impressive." They added that market attention will now focus on Kling AI's next major product upgrade.
Shares of Kuaishou rose as much as 6.9% in early trading on Friday before giving up the gains to close largely unchanged.
Kuaishou confirmed in May that it was exploring a restructuring of Kling AI following media reports about a possible spin-off but said discussions were still at an early stage.
