Kuaishou's Kling AI Completes $3 Billion Funding Round with 34 Investors Including Tencent, Alibaba, Baidu

On July 2, 2025, Kuaishou announced that its video generation model Kling AI completed independent financing and business restructuring, bringing in 34 investment institutions with a maximum funding scale of $3 billion (approximately RMB 20.447 billion). The pre-investment valuation was $15 billion, and the post-investment valuation reached $18 billion. Kuaishou still holds 68.33% of Beijing Kling, maintaining a controlling stake.

Investor Lineup

This funding round features a star-studded lineup, including internet giants, national-level funds, local industrial funds, and market-oriented institutions. Tencent invested approximately RMB 1.363 billion through two entities, Alibaba Cloud invested RMB 1.363 billion, and Baidu invested RMB 341 million. Additionally, the China Internet Investment Fund, Beijing AI Industry Investment Fund, Beijing Information Industry Development Investment Fund, CITIC Securities Investment, as well as Hony Capital, CPE Yuanfeng, and Shenzhen Capital Group system also participated. According to Z Finance, the lead investor may be a fund with Middle Eastern background, but Kuaishou's announcement did not explicitly mention it.

Financing Details and Use of Funds

The signed amount for this round is approximately RMB 19.047 billion, with the remaining quota open during the subscription period, totaling up to $3 billion. Kuaishou ceded approximately 16.67% equity to external investors, and after adding a 15% employee equity incentive pool, Kuaishou's stake dropped to 68.33%. The funds will be used for business expansion, daily operations, working capital, and team development. Kling AI plans to complete restructuring and share reform by 2026, with an IPO application expected in early 2027.

Commercialization Progress and Valuation

Kuaishou's announcement disclosed that as of the end of 2025, Kling AI's annual revenue was approximately RMB 1.1 billion; as of March 2026, the annualized revenue run rate (ARR) reached approximately $500 million. Z Finance reported that revenue in Q1 2025 exceeded RMB 650 million, a year-over-year increase of over 300%; global users exceeded 60 million, with over 600 million videos generated cumulatively, serving over 30,000 enterprises and developers. Based on an $18 billion valuation and $500 million ARR, the price-to-sales ratio is approximately 36x. Kuaishou considers the $15 billion pre-investment valuation reasonable, based on video generation model capabilities, commercialization progress, and market prospects.

Technology Iteration and Organizational Adjustment

Since the launch of version 1.0 in June 2024, Kling AI has completed 30 iterations within a year, releasing versions 2.0, 2.1, 3.0, and O1. In April 2025, Kuaishou established the Kling AI Business Unit, with its head reporting directly to CEO Cheng Yixiao, making it a first-level department alongside the main site and commercialization. In August 2025, the original technical lead Zhang Di left and was succeeded by Gai Kun. Zhang Di subsequently joined Alibaba's Taotian Group, and his team's HappyHorse-1.0 surpassed Kling 3.0 on authoritative leaderboards.

Industry Impact

The Kling AI financing is the largest funding round in the global AI video generation track in 2025, highlighting capital's enthusiasm for multimodal AI. By spinning off financing, Kuaishou unlocks Kling's independent value while retaining a controlling stake, which helps the market reassess Kuaishou's overall valuation.