Key Takeaways
- Kling AI raised 19 billion yuan ($2.8B) from Alibaba, Tencent, and Baidu at a $15 billion pre-money valuation
- Revenue hit 650 million yuan in Q1 2025, quadrupling from the same period last year
- Kuaishou's stake will drop from 100% to 68% after the investment closes
Kuaishou's AI video generator Kling AI has raised 19 billion yuan ($2.8 billion) from a group led by Alibaba, Tencent, and Baidu. The deal values Kling AI at $15 billion pre-money, making it one of China's most valuable AI startups less than a year after launch.
The round is capped at 20.45 billion yuan and remains open for additional investors over the next two months. Once the capital injection closes, Kuaishou's ownership of Kling AI will fall from 100% to roughly 68%.
Why are Alibaba and Tencent investing together?
Alibaba and Tencent are fierce rivals across e-commerce, payments, cloud, and gaming. Joint investments are rare. Their simultaneous backing of Kling AI signals how seriously both companies view AI video generation as a strategic technology.
Citi analysts called the investor roster "impressive" and noted that attention will now shift to Kling AI's next product upgrade. The inclusion of Baidu, China's search giant and a major AI player through its Ernie bot, adds another heavyweight to the cap table.
Kling AI's growth trajectory
Kling AI generated 650 million yuan in revenue during Q1 2025. That's more than four times what it earned in the same quarter last year. For context, Kling AI only launched in June 2024.
The product allows users to generate videos up to 160 seconds from text prompts, longer than OpenAI's Sora offered at its initial preview. Kuaishou operates China's second-largest short-video platform after ByteDance's Douyin, giving Kling AI a built-in distribution channel to hundreds of millions of creators.
China's AI funding boom
Technology companies have raised $3.1 billion from stock market listings in China through mid-June 2025. That's more than five times the amount raised over the same period last year.
The Kling AI round alone accounts for nearly the entire public-market tech fundraising total. Private capital continues to flow into Chinese AI at scale despite export restrictions on advanced chips and geopolitical friction with the United States.
Kuaishou acknowledged in May that it was exploring a restructuring of Kling AI following media reports of a potential spinoff. The company said at the time that discussions were preliminary. This funding round provides clarity: Kling AI is being positioned as a standalone entity with outside shareholders, even as Kuaishou retains majority control.
Market reaction and what comes next
Kuaishou shares jumped 6.9% on Friday morning in Hong Kong before giving up all gains to close flat. The muted finish suggests the market had priced in the funding news after weeks of speculation.
The next catalyst is Kling AI's upcoming product upgrade. Competitors are moving fast. OpenAI has expanded Sora access, and runway ml continues to iterate on its video models. Kling AI needs to demonstrate that its early lead in video length and quality can hold against well-funded Western rivals.
Logicity's Take
The real story here isn't the $2.8 billion. It's that Alibaba and Tencent rarely agree on anything, and they both agreed on this. AI video generation has moved from demo-stage curiosity to strategic infrastructure in under 18 months. For companies building marketing content, product demos, or training materials, the cost of video production is about to collapse. Kling AI competes directly with OpenAI's Sora, Runway ML's Gen-3, and Pika Labs. Pricing across these platforms ranges from free tiers to $100+ per month for commercial use, but expect enterprise offerings and API access to expand rapidly.
Frequently Asked Questions
What is Kling AI?
Kling AI is a text-to-video generation tool created by Kuaishou, China's second-largest short-video platform. It launched in June 2024 and can generate videos up to 160 seconds from text prompts.
How much is Kling AI worth after this funding round?
The round values Kling AI at $15 billion pre-money. After the $2.8 billion investment closes, the post-money valuation will be approximately $17.8 billion.
Who owns Kling AI now?
Kuaishou will own about 68% of Kling AI after the funding closes, down from 100%. Alibaba, Tencent, Baidu, and other investors will hold the remaining 32%.
How does Kling AI compare to OpenAI's Sora?
Kling AI can generate videos up to 160 seconds, compared to Sora's 60-second limit at launch. Both use text-to-video AI, but Kling AI has been commercially available longer and has a built-in distribution channel through Kuaishou's platform.
Related AI development from Google expanding agent capabilities
Need Help Implementing This?
Want to integrate AI video tools into your marketing or product workflows? Reach out to Logicity for guidance on selecting and deploying the right AI video platform for your use case.
Source: Tech-Economic Times / ET
Manaal Khan
Tech & Innovation Writer
Produced with AI assistance and reviewed by the Logicity editorial team. Learn more in our Editorial Policy.
