Kuaishou Technology (HKG: 1024) is in discussions with General Atlantic to lead a first round of external financing for its video AI unit, Kling AI, as the Chinese firm seeks a major American backer ahead of a planned initial public offering.
Kling AI is targeting a raise of more than $2 billion at a post-investment valuation of $18 billion, according to people familiar with the matter.
The company had initially held discussions with investors at a $20 billion target valuation, but trimmed those expectations to better match prevailing market appetite.
Kling, which generates videos and short films from user prompts, has drawn early interest from other Asia-focused investment firms, though negotiations remain at an early stage with no guarantee a deal proceeds on those terms.
Kuaishou’s shares gained as much as 8.9% in Hong Kong trading on Wednesday, buoyed by the funding discussions and a broader rally in Chinese AI stocks.
If completed, the deal would mark a rare bet by General Atlantic in China’s highly competitive generative AI arena, at a time when tensions between Beijing and Washington over the technology sector remain elevated.
General Atlantic is an early backer of Kuaishou’s much larger rival ByteDance Ltd. and is also known for early-stage investments in Meta Platforms Inc. (NASDAQ: META) and Uber Technologies Inc. (NYSE: UBER).
The investment would come against a charged geopolitical backdrop, with China’s government having ordered Meta to unwind its $2 billion takeover of Chinese-founded agentic AI platform Manus in April over concerns about the potential loss of key technology to a geopolitical rival.
Kling competes directly with ByteDance’s Seedance and startups such as Shengshu, and is among a wave of Chinese AI video tools aggressively pursuing global monetization after OpenAI shuttered its rival Sora service.
Kuaishou has confirmed it is assessing a proposal to restructure Kling for external funding, with The Information previously reporting that the service plans to carve out Kling ahead of a 2027 initial public offering.
Kling’s annual recurring revenue grew to approximately $500 million in March from $300 million in January, driven by the launch of Kling 3.0, reflecting rapid commercial momentum.
The unit generated revenue of over 650 million yuan, equivalent to $96.2 million, in the first quarter, representing growth of more than 300% compared to the same period a year earlier.
A representative for General Atlantic declined to comment, while Kuaishou spokespeople did not respond to requests for comment.
