Alibaba, Tencent back Kuaishou's Kling AI in $2.8 billion fundraise

China's Kuaishou Technology said on Thursday a group of investors including Alibaba and Tencent will inject over 19 billion yuan ($2.80 billion) in Kling AI, while valuing the popular AI video arm at $15 billion on a pre-money basis.

The fundraising underscores investors' appetite for ‌China's fast-growing ⁠AI ⁠sector, which continues to attract billions of dollars in fresh capital. ​Technology companies have raised a total of $3.1 billion from stock market listings ​in China this year to mid-June, more than five times the amount raised last year.

The fundraising for one of ​China's most popular video-generating services allows ⁠Kling AI ‌to bring an additional investor within the ​next ​two months, and is capped at 20.45 billion ⁠yuan.


Following the capital injection, Kuaishou's stake in Kling ​AI will be diluted to about 68% ​from 100%.

Heavyweights such as Alibaba, Tencent and Baidu have agreed to take stakes in Kling AI, which generated revenue of 650 million yuan in the March quarter, more than quadrupling from a year earlier.

While the pre-money ‌valuation came as no surprise, Citi analysts highlighted the "impressive" roster of investors, adding that all eyes ​will now ​turn to Kling ⁠AI's upcoming upgrade.

Shares of Kuaishou jumped as much as 6.9% on Friday before shedding all of it to end largely unchanged.

Kuaishou acknowledged exploring a restructuring of Kling AI in May following media reports of a looming spin-off, but maintained discussions were in their infancy.

($1 = 6.7779 Chinese yuan renminbi)