Kuaishou seeks $2 billion for Kling AI: General Atlantic in talks at $18 billion valuation

Kuaishou Technology, the Chinese competitor to TikTok, is in negotiations with the American venture fund General Atlantic to raise $2 billion for its video generation subsidiary — Kling AI. The expected company valuation in the first round will be $18 billion.

Why Kuaishou Needs a Western Backer

The decision to attract an American investor seems counterintuitive against the backdrop of U.S.-China technological competition. However, the logic here is pragmatic: General Atlantic — one of the world's largest technology funds with assets exceeding $100 billion — gives Kling AI the necessary international legitimacy. The participation of a fund of such scale signals to global institutional investors that the product is viewed not as regional, but as a full-fledged international player.

According to Bloomberg, this is precisely the goal of the negotiations — to pave the way for an IPO by attracting anchor Western investors in advance. Kuaishou is considering spinning off Kling AI as a separate entity before going public — using the scheme that other Chinese technology companies have successfully employed in international listings.

What is Kling AI

Kling AI is a generative video service launched in 2024. In a relatively short time, it has secured a notable position in the global AI tools market, competing with OpenAI's Sora, Runway, and Pika Labs.

Key product capabilities:

• Video generation up to 3 minutes long from text and visual prompts
• Support for high resolution with camera motion control
• Cinematic mode for cinematic frame styling
• Availability via API for developers and through a web interface for users
• Competitive quality-to-price ratio compared to Western alternatives

The product has found an audience not only in China but also in Europe, the United States, and Southeast Asia. Marketers, advertising agencies, and independent content creators use it as an alternative to more expensive Western platforms.

The $18 Billion Valuation and the Video AI Race

$18 billion is a serious threshold even by the standards of an overheated AI market. For comparison: Runway, the American leader in video generation, was valued at $4 billion in 2024. Kling AI is claiming a valuation more than four times higher, despite the product being less than two years old.

This gap reflects the general logic of video AI investments: the market believes that platforms capturing video generation infrastructure in the next two to three years will define the future of media production, advertising, and entertainment.

A full-scale race is now underway in the market. Google is developing Veo, OpenAI — Sora, and dozens of startups are competing for market share. Kling has positioned itself as an aggressive price competitor with quality comparable to top Western products.

"Video generation is the next frontier after text models.

Whoever builds the infrastructure now will have a five-year advantage," — this is how AI market analysts describe the investment frenzy.

What This Means

If the deal with General Atlantic closes on the stated terms, it will become one of the largest Series A rounds in the history of video AI. More importantly: the American fund is willing to invest in a Chinese AI company at a time when many are refraining from such moves. This changes the investment logic of the sector — and sends a signal that global capital still follows real products.