Kling AI Secures $2 Billion Funding at $18 Billion Valuation
Kuaishou Technology submitted regulatory filings in Hong Kong announcing a multi-billion dollar capitalization plan for its artificial intelligence division, Kling AI. The corporate disclosure confirms the text-to-video unit raised an initial 2 billion dollars from external venture capital firms. Management stated that ongoing negotiations could expand the total investment pool.
The company included the following projection in the official statement:
"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"
The final funding agreement establishes an 18 billion dollar post-money valuation for the video application. This figure represents a 10% reduction from the 20 billion dollar valuation target that Kuaishou originally sought during initial investor meetings in April.
Financial analysts track this valuation adjustment as an indicator of broader investor caution regarding early-stage generative software platforms.
Documents sent to the Hong Kong Stock Exchange show that Kuaishou intends to execute a formal spin-off and list Kling AI independently within the next 12 months. If the financing round reaches its 3 billion dollar ceiling, Kuaishou will retain a 68.33% controlling stake in the standalone business.
Global growth equity group General Atlantic led the capital negotiations for the financing round. Industrial tech giant Tencent participated directly by purchasing a 200 million dollar stake in the unit. A syndicate of 21 additional institutional investors supported the transaction, including Citic Securities, BlueFive, CPE, and Guofang Investment.
Corporate reports indicate that Kling AI will direct the capital toward building physical data centers and acquiring advanced processing infrastructure. The subsidiary will also deploy funds to expand its core team of technical researchers and software engineering staff.
Financial data released alongside the filing shows rapid growth in the subsidiary's commercial operations over the past two quarters. The platform increased its annualized recurring revenue from 240 million dollars in December 2025 to 500 million dollars by March of this year.
First-quarter revenue exceeded 650 million yuan, matching approximately 96 million dollars and tripling the company's financial intake from the same quarter last year.
International users generate three-quarters of the platform's total revenue stream. The system converts short text prompts into high-definition video clips, selling automated video production services to marketing agencies, advertising firms, and film production groups.
The international growth follows a major shift in the competitive layout after OpenAI discontinued its rival Sora video platform in March.
OpenAI pulled the Sora software from commercial testing after high computing costs, averaging 1 million dollars per day, and high user attrition rates impacted operations.
Kling AI now competes directly with other active automated video platforms. The main market alternatives include Google's Veo system and ByteDance's specialized Seedance application.
The presence of United States private equity capital inside Kling AI occurs amidst strict regulatory scrutiny from both Washington and Beijing.
The Chinese government previously issued policy advisories instructing local technology developers to reduce dependency on foreign financing packages.
The transaction also follows an April regulatory decree where Beijing forced Meta to completely dissolve its 2 billion dollar acquisition of the software provider Manus.
Public equities markets responded with immediate volatility following the morning filing.
Kuaishou shares opened 6.89% higher on the Hong Kong Stock Exchange as institutional investors reacted to the multi-billion dollar cash injection.
The stock subsequently dropped throughout the day, closing 0.1% lower as traders assessed the immediate dilution of Kuaishou's equity assets.
