Kling AI raises $2.8B at $15B valuation with backing from Alibaba, Tencent, and Baidu

China’s AI investment boom just got another major vote of confidence. Kling AI, one of the country’s most popular AI video generation platforms, has secured more than $2.8 billion in fresh funding from a group of investors led by tech giants Alibaba, Tencent, and Baidu. The deal values the company at $15 billion before the new capital and signals that investors still see massive growth ahead for AI companies building consumer and enterprise products.

The investment comes as China’s AI sector continues to attract billions of dollars in new capital, with investors racing to back companies developing foundation models, AI infrastructure, robotics, and generative AI applications.

Kuaishou Technology announced Thursday that investors will inject more than 19 billion yuan, or about $2.8 billion, into Kling AI. The fundraising values the AI video business at 105 billion yuan, or roughly $15 billion, on a pre-money basis, Reuters reported.

The financing remains open for a short period, allowing Kling AI to bring in another investor over the next two months before the round closes at 20.45 billion yuan.

Once the transaction is completed, Kuaishou’s ownership of Kling AI will fall to about 68% from full ownership, marking a major step toward separating the AI business into a more independent company backed by some of China’s largest technology firms.

Alibaba and Tencent invest $2.8B in Kling AI, valuing AI video startup at $15 billion

The investor list stands out as much as the size of the funding round. Alibaba, Tencent, and Baidu have agreed to acquire stakes in Kling AI, providing the company with financial backing from three of China’s biggest technology names. The participation of multiple industry leaders points to growing confidence that AI-generated video will become a major segment of the country’s AI market.

The investment follows strong business growth. Kling AI generated 650 million yuan in revenue during the quarter ended in March, more than four times higher than the same period a year earlier. The rapid revenue growth gives investors another signal that demand for AI video tools continues to rise across content creation, marketing, entertainment, and business applications.

Analysts at Citi said the $15 billion pre-money valuation was largely in line with market expectations. Their attention centered on the investor lineup, which they called “impressive,” and suggested the market will now focus on Kling AI’s next product upgrade, according to Reuters.

Kuaishou first confirmed in May that it was exploring a restructuring of Kling AI after reports surfaced about a possible spin-off. At the time, the company said discussions remained in their early stages. This latest funding round moves that restructuring forward and gives Kling AI additional resources to compete in an AI video market that has become one of the most closely watched segments of generative AI.

The announcement arrives during a strong year for AI fundraising across China. Technology companies raised about $3.1 billion through stock market listings in mainland China during the first half of the year, more than five times the amount raised during the same period last year. The trend reflects continued investor demand for AI companies despite broader uncertainty across parts of the technology sector.

Investors initially welcomed the news, sending Kuaishou shares up as much as 6.9% in Friday trading before the stock gave back those gains and finished the session little changed. Even so, the size of Kling AI’s funding round and the roster of investors place the company among China’s highest-valued AI startups and reinforce the country’s push to build globally competitive AI leaders.