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

Reuters

Fri, July 3, 2026 at 2:35 AM PDT 1 min read

July 2 (Reuters) - 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)

(Reporting by Sneha ​Kumar and Jasmeen Ara Shaikh in Bengaluru; Editing by ​Vijay Kishore and Eileen Soreng)