Kuaishou seeks $2B for Kling AI as General Atlantic negotiates an $18B valuation

Kuaishou Technology, a Chinese rival to TikTok, is in talks with US investment firm General Atlantic to raise $2 billion for Kling AI, its video generation unit. The first round is expected to value the business at $18 billion.

Why Kuaishou needs a Western backer

Choosing a US investor looks like an unusual move given the tech rivalry between the US and China. The reasoning, however, is pragmatic: General Atlantic, one of the world's largest technology investors with more than $100 billion in assets, gives Kling AI the international legitimacy it needs. Backing from a firm of that size tells global institutional investors that the product is not a regional play but a full-fledged international contender.

According to Bloomberg, that is exactly the point of the talks: lay the groundwork for an IPO by bringing in anchor Western investors early. Kuaishou is considering spinning Kling AI off into a standalone entity before listing, following a playbook other Chinese tech companies have used successfully for international listings.

What Kling AI is

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

The product's key capabilities:

• Generates videos up to 3 minutes long from text and image prompts
• Supports high resolution with camera motion control
• Offers a Cinematic mode for film-style shots
• Is available via API for developers and via a web interface for users
• Delivers a competitive quality-to-price ratio compared with Western alternatives

The product has found an audience not only in China but also in Europe, the US, and Southeast Asia. Marketers, ad agencies, and independent creators use it as an alternative to pricier Western platforms.

The $18B valuation and the video AI race

$18 billion is a high bar even by the standards of an overheated AI market. For comparison, Runway, the US leader in video generation, was valued at $4 billion in 2024. Kling AI is seeking a valuation more than four times higher, even though the product is not yet two years old.

The gap reflects the broader investment thesis in video AI: the market believes the platforms that capture video generation infrastructure over the next two to three years will shape the future of media production, advertising, and entertainment.

The market is now in a full-blown race. Google is building Veo, OpenAI is building Sora, and dozens of startups are fighting for share. Kling has positioned itself as an aggressive price competitor with quality comparable to top Western products.

"Video generation is the next front after text models.

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

What it means

If the General Atlantic deal closes on the stated terms, it will be one of the largest first rounds in the history of video AI. More important, a US firm is willing to invest in a Chinese AI company at a time when many are holding back from such moves. That shifts the sector's investment logic and signals that global capital still follows real products.