Kuaishou Technology is in talks with General Atlantic to lead the first external financing for Kling AI, its video generation unit, as the Chinese company prepares the business for a planned initial public offering. Kling AI is seeking to raise more than $2 billion at a post-investment valuation of $18 billion, after earlier investor discussions around a $20 billion target valuation were reduced to better align with market demand.
The talks remain preliminary, and other Asia-focused investment firms have shown early interest. Kuaishou’s shares gained as much as 8.9% in Hong Kong trading on Wednesday, supported by the funding discussions and a broader rise in Chinese AI stocks.
A deal would give Kling a major American investor despite heightened US-China technology tensions. General Atlantic previously backed ByteDance Ltd., Meta Platforms Inc. and Uber Technologies Inc., while China’s government in April ordered Meta to unwind its $2 billion takeover of Chinese-founded agentic AI platform Manus over technology-transfer concerns.
Kling competes with ByteDance’s Seedance and startups including Shengshu in AI video generation and is pursuing global monetization after OpenAI shuttered Sora. Kuaishou has said it is evaluating a restructuring proposal for external funding, and the service is expected to be carved out before a 2027 initial public offering. Kling’s annual recurring revenue rose to approximately $500 million in March from $300 million in January, driven by Kling 3.0.