Kuaishou’s AI video unit Kling has completed a fundraising round of about 19.8 billion yuan, or $2.98 billion, the Chinese short-video company said on October 30. Kuaishou will keep two-thirds of the equity in Beijing Kling and 52.45 percent of the voting rights through its Lucky Labs holding vehicle, keeping control of the video-generation maker while bringing in new investors. The raise follows a $2.8 billion round in July and comes as Kling plans an initial public offering next year.
What the round looks like
The new investors named in the announcement are modest in size compared with the round itself, which suggests much of the money came from existing backers or investors not individually disclosed. A unit of Hong Kong-listed Kingdee International invested 300 million yuan, Gongqingcheng Junke put in 200 million yuan, and a unit of Shanghai-listed MetaX added 100 million yuan.
Those investors partially took over other investors’ commitments and received redemption rights, a term that gives them a route to get money back under agreed conditions. Kuaishou did not reveal how Kling will use the proceeds, leaving the company’s next moves to be read from its competitive position rather than a stated plan.
The July round drew investors including Alibaba and Tencent and valued Kling at $15 billion before the new money, a benchmark the latest round’s valuation has not been disclosed against. Two raises totalling roughly $5.8 billion in four months show how capital-intensive the AI video race has become, even for a unit inside a large listed company.
A crowded video race
Kling competes with AI video generation models from OpenAI, Google and TikTok owner ByteDance, a field crowded with rival video models where leaders are set by model quality and the cost of generating each clip. The race has produced a distinct pattern: video models that began as research demonstrations are now sold as creator tools, advertising engines and film-production aids.
Kling’s position is unusual because it sits inside Kuaishou, a short-video platform with its own massive audience, giving it a built-in distribution channel that standalone video startups lack. That audience advantage may matter as much as model quality, since the best video tool still needs viewers and creators to succeed.
The planned IPO, reported by Bloomberg earlier in October, would test whether public markets value an AI video unit on its own terms rather than as part of a parent company. A listing would also force fuller disclosure of Kling’s revenue, costs and the terms of the latest round, including the redemption rights granted to new investors.
Until then, the headline figure is the story: nearly $3 billion for a video-generation business, in a year when investors have grown more selective about AI valuations elsewhere. The size of the raise alone signals that video generation is still treated as a strategic asset, not a passing trend.
Why It Matters
The raise matters because it shows where AI investment is still flowing freely: applied video generation with a clear product and an existing audience, rather than general-purpose model labs. For creators, a well-funded Kling means more competition among video tools, which should push down prices and push up quality.
That competition is broadening beyond the big labs, as newer creator-focused video studios such as Genspark’s AI video director show. For rivals, Kling’s funding raises the cost of staying in the race, since every round by a competitor resets the compute and talent budget needed to keep up.
For the wider AI market, Kling’s back-to-back raises are a counterpoint to the caution seen in other AI financings this year. Investors are still willing to write very large cheques, but they are concentrating them on businesses with distribution, revenue prospects and a path to listing.
Kuaishou keeping majority voting control is equally telling: the parent is raising outside money without giving up the unit, a structure that lets it fund the video race while keeping the strategic asset in-house. Other platform owners with AI units may copy that structure.
Background
Kling is the AI video generation unit of Kuaishou Technology, the Tencent-backed operator of the Kwai short-video platform. Its July 2026 raise of $2.8 billion valued the unit at $15 billion before the new money, and Bloomberg News reported earlier in October that Kling is planning an initial public offering next year.
Source: Reuters report
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