Kling AI Raises $2.8 Billion at $15 Billion Valuation, Backed by Tencent, Alibaba, and Baidu

The Deal

Kuaishou Technology filed the details with Hong Kong Exchanges and Clearing on the evening of July 2, 2026. The filing confirmed a funding round of approximately 19 billion yuan, or $2.79 billion, for its AI video generation subsidiary, Kling AI, according to CNBC and the South China Morning Post.

The round is the largest ever raised by an AI video model company globally, according to SCMP.

Kuaishou's stake in Kling AI will be diluted to roughly 68% as a result, with the remainder spread across 21 or more independent investors, according to CNBC and Business Times.

Who Wrote the Checks

This wasn't a small circle of VCs. The round was co-led by CPE, Guofang Venture Capital, BlueFive, Tencent, CITIC Securities, and Zhongguancun Science City Fund together with CAS Investment, according to TechNode. Alibaba Cloud and Baidu also participated, alongside Huace Film & TV, Mango Investment, and dozens of others.

Two Beijing state-backed vehicles were in the mix: the Beijing Information Industry Development Investment Fund and the Beijing Artificial Intelligence Industry Investment Fund, according to SCMP.

Tencent committed $200 million specifically, according to CNBC. That's notable because Tencent runs Hunyuan, a direct domestic competitor to Kling AI. Whether this represents strategic logic or market hedging, Tencent placed a sizable chip on a rival's table.

Lighthouse Capital served as exclusive financial adviser and also invested through its own Lighthouse Founders' Fund, according to TechNode. The firm said its relationship with Kuaishou stretches back 12 years to the company's early-stage fundraising days.

Valuation Reality Check

Kuaishou had originally targeted a post-investment valuation of up to $20 billion, but scaled back those ambitions earlier this year, according to Bloomberg reporting cited by Business Times. The confirmed pre-money valuation is $15 billion. If the round reaches its full $3 billion ceiling with additional investors, the post-money figure climbs to roughly $18 billion, per Business Times.

The gap between $20 billion and $18 billion is a reminder that even hot AI assets face ceiling pressure when global macro conditions and investor scrutiny tighten.

Why Kling AI Matters

Kling AI launched in June 2024 and now claims more than 60 million creators globally, according to CNBC. Its annual recurring revenue grew from $300 million in January 2026 to approximately $500 million by March 2026, driven by the release of Kling 3.0, per Business Times. First-quarter 2026 revenue came in above 650 million yuan ($96.2 million), up more than 300% year-over-year.

Those are real numbers, not projections. The business grew faster in two months than many mature SaaS companies grow in a year.

Kling competes directly with ByteDance's Seedance and domestic startup Shengshu, and is expanding its push for paying customers outside China, particularly targeting filmmakers, advertisers, and creative studios, according to Business Times. Competition in the AI video space has intensified globally, and Chinese AI video platforms have been moving aggressively to capture international market share.

Kuaishou itself isn't a startup. It's China's second-largest short-video platform, with 700 million monthly active users averaging more than 130 minutes per day on its apps, according to CNBC.

The Counterargument Worth Taking Seriously

Skeptics have a legitimate point: Chinese AI companies, including state-backed ones, operate in an environment where regulatory and geopolitical risk is real. U.S. export controls on advanced chips remain in force. Western enterprise customers considering Kling AI tools face questions about data sovereignty and supply chain exposure to Chinese infrastructure. For global creative studios or advertisers weighing Kling against American or European alternatives, those aren't paranoid concerns. They're standard due diligence.

The presence of Chinese state capital in this round, specifically two Beijing government funds, will not make that calculus easier for international customers or partners.

That said, nothing in the disclosed deal structure indicates that Kling AI's international commercial push is restricted or conditioned by the state investors' participation. The funding is framed as supporting Kling AI's transition to independent commercial operations, per TechNode.

What Comes Next

The funding is explicitly structured to support Kling AI's eventual spin-off and public listing, according to Business Times. No exchange, timeline, or listing date has been announced publicly. The question of whether that IPO lands in Hong Kong, on a mainland exchange, or elsewhere will matter considerably for how international investors can access the company and how much regulatory scrutiny it draws.

With a $15-18 billion valuation now on the books and revenue growing at triple-digit rates, the pressure is on Kuaishou to demonstrate that Kling AI can hold that multiple through an IPO process, not just in a private funding round where the terms are negotiated rather than discovered by a public market.