Kling AI, the video-generation unit of Chinese short-video giant Kuaishou, raised roughly $2.8 billion in a round announced on July 2, 2026, valuing the newly spun-off entity, Beijing Kling, at about $18 billion post-money. The round was co-led by CPE, Tencent and CITIC Securities, with Alibaba and Baidu also writing checks — a rare case of China's biggest tech rivals backing the same AI company at once.
Here's what's confirmed about the raise, who's behind it, and why competitors funding each other is the more interesting story than the number itself.
What is Kling AI?
Kling AI is Kuaishou's generative video model and app, one of the most widely used text-to-video and image-to-video tools in China and a direct competitor to OpenAI's Sora and ByteDance's Seedance. It launched in 2024 and scaled quickly on the back of Kuaishou's existing short-video audience, adding features for longer clips, better motion consistency, and creative tools aimed at both casual users and professional production studios.
Until this round, Kling was fully owned and run inside Kuaishou. The funding effectively carves it out into its own company — Beijing Kling — with outside shareholders for the first time, ahead of a planned Hong Kong Stock Exchange listing within 12 months.
The raise
The numbers, as reported by Bloomberg and confirmed across multiple outlets:
- Amount: ~$2.8 billion (about 19 billion yuan), built from an initial ~$2.03 billion commitment plus roughly $766 million from a second wave of investors — with the round structured to potentially stretch toward $3 billion
- Structure: A minority stake sale in a new subsidiary, Beijing Kling, not a traditional startup priced round
- Valuation: $15 billion pre-money, ~$18 billion post-money
- Announced: July 2, 2026
- Co-leads: CPE, Tencent, CITIC Securities
Importantly, this is not Kling raising as an independent startup from scratch — it's Kuaishou selling down roughly a third of a newly created subsidiary while keeping control. Kuaishou's ownership drops from 100% to about 68% once the round fully closes, and Kuaishou stock jumped on the news.
The business case behind the valuation: Kling's revenue hit roughly RMB 650 million (~$90 million) in Q1 2026, more than quadrupling year-over-year, with an annualized revenue run rate that reportedly climbed from around $240 million to near $500 million in just a few months.
Who invested in Kling AI?
The investor list is the real headline. It includes roughly 36 investors, among them:
- CPE, Tencent, CITIC Securities — co-leads
- Alibaba (via Alibaba Cloud)
- Baidu
- BlueFive Capital — an Abu Dhabi-based firm, bringing Gulf sovereign capital into the deal
- Qiming Venture Partners
- State- and city-linked vehicles including the China Internet Investment Fund, the Beijing Artificial Intelligence Industry Investment Fund, and Shanghai Guofang
- Industry and media players such as Huace Film & TV
The standout detail: Alibaba, Tencent and Baidu — China's three largest tech companies, all building their own AI video and cloud products — chose to fund a rival's video unit rather than compete head-on. That's a signal about how capital-intensive and consolidated the AI video race has become, even for companies with deep pockets of their own.
What the money is for
Kuaishou and Kling have pointed to three uses for the capital:
- Compute and data centers — training and serving video models is extremely GPU-intensive, and scaling Kling's user base means scaling infrastructure to match.
- Talent — attracting and retaining AI researchers and engineers in a market where Chinese labs are competing directly with well-funded rivals for the same pool of people.
- IPO readiness — the round is explicitly structured as a pre-listing raise, with Kuaishou targeting a Hong Kong Stock Exchange listing for Kling within roughly 12 months of the funding closing.
In other words, this isn't just growth capital — it's a balance sheet being built specifically to survive due diligence for a public listing.
Why it matters
Three things make this round worth tracking beyond the headline dollar figure:
- China's AI video race just got a lot better funded. At an $18 billion valuation, Kling is now one of the most valuable AI video businesses anywhere, competing directly with Sora and Seedance for enterprise and creator adoption. For more on how capital is flowing into this category globally, see Wortins' look at AI video startup funding in 2026.
- Rivals are pooling capital instead of just competing on product. Alibaba, Tencent and Baidu backing the same company is unusual and suggests Chinese tech giants see more value in owning a piece of the category leader than racing to out-build it alone.
- Spin-offs are becoming an AI funding pattern. Rather than raising inside the parent company, Kuaishou carved out a subsidiary, sold a minority stake, and set a listing clock — a structure other conglomerates sitting on valuable AI units may start to copy.
For the full picture of how this raise compares to other major AI deals this year, Wortins tracks every significant round in the AI Funding Tracker.