Kuaishou’s AI video generation platform Kling AI is about to complete an independent funding round of over $3 billion, with a post-investment valuation of $18 billion. Kuaishou initially expected a $20 billion valuation, which was lowered to the current figure after feedback from the capital market. According to reports, the potential lead investor in this round is a fund with Middle Eastern background, while Tencent, Alibaba, General Atlantic, and Sequoia Capital are on the list of potential investors.
Kling AI Funding Size $3 Billion, Valuation $18 Billion
According to reports, this funding round amounts to over $3 billion, with a post-investment valuation of $18 billion — down from Kuaishou’s initial psychological expectation of $20 billion. Even so, it is still described in reports as the largest independent funding round in the global AI video generation赛道 in 2026. Kling AI plans to complete restructuring and share reform in 2026, and formally submit an IPO application in early 2027. Specific funding completion timeline, listing progress, and valuation are subject to official announcements.
Kling AI Core Financial & User Data: Q1 YoY Growth 300%, ARR $500 Million
According to public financial reports, Kling AI’s full-year revenue in 2025 was approximately ¥1.04 billion, accounting for only 0.73% of Kuaishou’s total revenue.
Entering 2026, commercialization accelerated significantly. Key financial and user data: Q1 2026 revenue exceeded ¥650 million, up over 300% year-over-year; as of March 2026, ARR (annualized recurring revenue) reached $500 million; based on the $18 billion valuation, the price-to-ARR ratio is about 36x; global users exceeded 60 million, with over 600 million videos generated cumulatively, providing API services to over 30,000 enterprises and developers.
In comparison, Silicon Valley AI video pioneer Runway took about six years from founding to reach $100 million in ARR, while Kling AI shortened this cycle to two years.
Kuaishou Parent Company Financial Pressure: Q1 Profit Down 26.3%, Forcing Kling AI Independent Funding
The background for Kling AI seeking independent funding is the financial pressure on parent company Kuaishou. In Q1 2026, Kuaishou’s total revenue was ¥33.7 billion, with year-over-year growth of only 3.4% (the lowest growth rate since listing). Adjusted net profit was ¥3.37 billion, down 26.3% from the same period last year. Live streaming business revenue fell 13.5% year-over-year. Kuaishou expects full-year capital expenditure of ¥26 billion, with the vast majority invested in Kling AI. R&D expenses in Q1 reached ¥3.6 billion (up 9.8% year-over-year), and the financial report explicitly stated that AI investment is “the main reason dragging down the company’s overall gross margin.”
In comparison, ByteDance’s AI infrastructure spending in 2026 is expected to exceed ¥200 billion, while Alibaba and Tencent are also pushing forward at the hundred-billion level. Kuaishou’s total revenue for the full year 2025 was ¥142.8 billion, showing a clear resource gap. A previous report by China Entrepreneur magazine described Kling AI’s independent funding as Kuaishou’s “only solution to stop the bleeding and keep Kling alive.”
Kling AI’s Six Key Milestones in Two Years: Technical Evolution from 1.0 Launch to 3.0 Omni
Based on public information, Kling AI’s major version milestones are as follows:
June 6, 2024: Kling 1.0 officially launched, becoming one of the world’s first available AI video generation products before OpenAI Sora’s commercialization.
February 2025: Eight months after launch, cumulative revenue exceeded ¥100 million.
April 2025: Kling 2.0 released; Kuaishou formally established the Kling AI business unit, with its head reporting directly to the CEO — the only new independent business unit created in nearly three years.
December 2025: Kling O1 released, with five updates in five days, integrating generation and editing functions.
February 2026: Kling 3.0 series launched, integrating image generation, video generation, editing, and post-production into a full film-level workflow.
April 2026: 3.0 Omni released, the industry’s first native 4K direct output feature officially launched.
Frequently Asked Questions
Why was Kling AI’s valuation for this round lowered from $20 billion to $18 billion?
According to reports, Kuaishou’s initial psychological expectation for this round was $20 billion, but it was lowered to $18 billion after capital market feedback. Based on the $18 billion valuation and $500 million ARR, the price-to-ARR ratio is approximately 36x. Specific pricing and final transaction valuation are subject to official announcements.
Who are the potential investors in Kling AI’s funding round?
According to reports, the potential lead investor is a fund with Middle Eastern background. Tencent, Alibaba, General Atlantic, and Sequoia Capital are also on the list of potential investors. Actual participation and investment amounts of each investor are subject to official announcements.
What is Kling AI’s relationship with Kuaishou, and why does it need independent funding?
Kling AI is an AI video generation platform under Kuaishou. In April 2025, it was elevated to an independent business unit reporting directly to Kuaishou’s CEO. Due to slowing growth in Kuaishou’s traditional business (Q1 2026 growth of only 3.4%) and AI investments continuously dragging down gross margins, Kuaishou is spinning off Kling AI to the capital market independently. It plans to complete restructuring and share reform in 2026 and submit an IPO application in early 2027.
