Kuaishou-backed Kling AI is nearing a $3 billion round at an $18 billion valuation, with Tencent participating, per sources. The valuation was cut from an initial $20 billion target set in April, reflecting shifting market sentiment for the AI video generation startup.
Key facts
- $3 billion fundraising round near close
- $18 billion post-money valuation
- Valuation cut from $20 billion target in April
- Tencent among investors in the round
- HK listing process expected within 12 months
Kuaishou-backed Kling AI is close to completing a US$3 billion fundraising round that would value the company at US$18 billion post-investment, according to people familiar with the matter [per SCMP]. The latest valuation was narrowed from an initial target of US$20 billion set in April, when Chinese short-video giant Kuaishou first planned to spin off Kling AI, according to a source, reflecting the shifting market sentiment for Kling AI. Investors backing this round include Chinese video gaming and social media giant Tencent, another source said.
Kuaishou disclosed in a May 12 filing with the Hong Kong stock exchange that it was "assessing a proposal to restructure" Kling AI that could involve raising funds from external investors. Kuaishou also expects to start Kling AI's Hong Kong stock exchange listing process in the next 12 months, according to a source close to the deal, with fundraising from the initial public offering going towards the buildout of computing and data centres and the acquisition and retention of talent.
The $18 billion valuation, while down from the initial $20 billion target, still places Kling AI among the most valuable AI startups globally, especially in the video generation segment. The round comes as competition intensifies in China's AI video generation sector, with rivals including Sora and other domestic players. Tencent's involvement is notable given its existing investments in other Chinese AI startups like Moonshot AI and DeepSeek [per entity relationships], signaling a consolidation play in the space.
Kuaishou's Hong Kong-listed shares closed up 1.46 per cent at HK$41.60 on Wednesday. Kuaishou, Kling AI and Tencent did not immediately reply to a request for comment.
Key Takeaways
- Kuaishou-backed Kling AI nears $3B round at $18B valuation, down from $20B target.
- Tencent invests as HK listing looms within 12 months.
What to watch
Watch for Kuaishou's next HK exchange filing detailing the restructuring and investor names. The key metric to track is Kling AI's ARR growth trajectory, which the source says soared after its latest AI video model release. A formal listing application within 6-9 months would signal confidence.
Source: scmp.com
