(June 17): Kuaishou Technology is in discussions with General Atlantic to lead a first round of financing for its video AI arm, seeking to secure a major US backer ahead of an initial public offering (IPO).
Kling AI aims to raise more than US$2 billion at a post-investment valuation of US$18 billion, according to people familiar with the matter. The Chinese firm had held initial discussions with investors about financing at a US$20 billion target, but trimmed those expectations to match market appetite, the people said. Kling — which like OpenAI’s now-defunct Sora generates videos and short films from user prompts — has drawn initial interest from other Asia-focused investment firms, the people said, asking to remain anonymous describing private conversations.
Negotiations remain at an early stage and there’s no guarantee a deal would proceed at those terms, the people said. If it goes ahead, that would mark a rare bet by General Atlantic — an early backer of Kuaishou’s much bigger rival ByteDance Ltd. — in China’s highly competitive generative AI arena. The US private equity firm, known for early investments in Meta Platforms Inc and Uber Technologies Inc, would also be buying into Kling AI at a time tensions are running high between Beijing and Washington over the burgeoning technology.
China’s government in April ordered Meta to unwind its US$2 billion takeover of Chinese-founded agentic AI platform Manus, after the acquisition raised concerns about the potential loss of key technology to a geopolitical rival. Benchmark Capital invested in the same startup about a year prior, drawing criticism from US lawmakers and prominent Silicon Valley voices about enabling Beijing. A representative for General Atlantic declined to comment, while Kuaishou spokespeople didn’t respond to requests for comment.
Kling is among a wave of Chinese AI video tools aggressively pursuing global monetisation, moving to fill a void after OpenAI shuttered its rival Sora service. It competes with ByteDance’s Seedance and startups like Shengshu in delivering high-quality clips for professional filmmakers, advertisers and creative studios.
Kuaishou said earlier that it is assessing a proposal to restructure Kling for external funding. The Information previously reported that the video service plans to carve Kling out ahead of an IPO in 2027.
See also: Xiaohongshu said to ready Hong Kong IPO filing this month
Kling’s annual recurring revenue — a gauge of forward-looking sales — grew to about US$500 million in March from US$300 million in January, driven by the launch of Kling 3.0. It generated revenue of over 650 million yuan (US$96.2 million) in the first quarter, up more than 300% from a year ago.
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