Chinese video artificial intelligence model company Kling has raised approximately 4.67 trillion won in investment. This is the second largest funding round in China’s overall generative AI market this year, after DeepSeek’s 11 trillion won. Through this investment process, Kling’s valuation rose to approximately $18 billion (approximately 27.54 trillion won), making it the highest level in the world for a single video AI model company. Kling has become well-known for its business-to-business (B2B) revenue model, and all eyes are on whether it will be able to maintain its leadership despite counterattacks from rivals such as SeaDance.
According to local media outlet Jiemian News on Wednesday, Kling’s parent company Kuaishou announced on the 2nd that it would raise up to $3 billion (approximately 4.67 trillion won) in external funds through a third-party allotment of capital through a filing with the Hong Kong Stock Exchange. A total of $2.8 billion has been raised so far, and once the funding is complete, Kuaishou’s ownership in Kling will decrease from 100% to 68.33%.
The investment is a pre-IPO round and will see Kuaishou spin off Kling and begin the process of listing it on the Hong Kong Stock Exchange within 12 months. Kuaishou has created a put option that allows investors to sell back their shares at the original purchase price plus an annual interest rate of 8% if the IPO is not completed by October 30, 2031.
The $3 billion investment is the second-largest single round in China’s generative AI space this year, after DeepSeek (approximately $7.3 billion). In particular, it is said to be the largest in terms of video generation AI models alone. The total corporate valuation is estimated to be approximately $18 billion, which is close to 80% of the market capitalization of parent company Kaishu (approximately $23.5 billion), and overwhelmingly exceeds rivals such as US Runway (approximately $5.3 billion) and Picaloves (approximately $1 billion). However, competitors such as Google’s Veo and ByteDance’s Seedance operate as internal business units, making it difficult to directly compare valuations.
Kling, along with Seedance, is considered one of the two major forces in video AI in China. Driven by viral content such as dancing dogs and stadium goddesses, the number of users worldwide has exceeded 100 million as of last month.
Approximately 70% of its revenue comes from international subscriptions and application programming interface (API) calls for its 50,000 customers. In particular, it has been rated better than Seedance in performance areas that are important in the B2B space, such as image consistency. Goldman Sachs also said that while Seadance has strong technology, Kling has more commercial advantages. Sales in the first quarter of this year exceeded 650 million yuan (approximately 146.5 billion won), an increase of more than 300% compared to the same period last year.
This investment provided Kling with ammunition to take on its biggest rival, Seadance. The participation of three major Chinese tech companies (Baidu, Alibaba and Tencent) in Kling Investment is also seen by analysts as an attempt to prevent Seadance from quickly dominating the video AI market. In particular, Alibaba Cloud poured in 1.363 billion yuan, making it the second largest amount among publicly disclosed external investors.
But there are also major concerns. Kuaishou plans to invest 26 billion yuan in capital this year, most of which will be used for infrastructure investment needed for Kling’s services. The $3 billion (approximately 21.5 billion yuan) secured this time is less than one year’s investment plan. By contrast, SeaDance’s parent company ByteDance plans to invest 200 billion yuan (45 trillion won) in overall AI infrastructure this year alone. Alibaba, which invested heavily in Kling, also hired a former Kling CEO to develop its video AI model Happy Horse.
