Hong Kong-listed Chinese technology company Kuaishou is reportedly preparing to spin off its AI video generation platform Kling AI in a deal that could value the business at around US$20 billion. The company is said to be seeking around US$2 billion in new funding ahead of a potential standalone listing within the next few years.
According to reports, Kuaishou has already started discussions with potential investors, including Chinese tech giant Tencent, as interest in AI-generated video platforms continues to grow globally. The spinoff is one of the largest funding rounds in the generative AI video space and could significantly change the way investors value AI-centric businesses in China.
Since its launch in 2024, Kling AI has quickly emerged as one of China’s leading AI video generation platforms. The platform allows users to create realistic videos using text prompts and has become popular among creators, marketers, and companies producing AI-generated content. According to the report, Kling’s annual revenue run rate recently reached approximately USD 500 million, reflecting strong commercialization momentum in the AI video market.
Industry analysts believe that Kuaishou’s decision to separate Kling AI was mainly due to its valuation strategy. While Kuaishou is primarily valued as a short video and e-commerce company, Kling AI has the potential to command significantly higher valuation multiples as a standalone artificial intelligence business. Experts say the move reflects a broader trend of big technology companies spinning off their AI divisions to unlock value for shareholders and attract specialized investors.
The report also triggered a strong reaction in financial markets, with Kuaishou shares reportedly rising up to 10% on news of the possible spin-off. Analysts noted that Kling AI’s reported valuation would reach nearly 70% of Kuaishou’s current market capitalization, highlighting investors’ growing enthusiasm for generative AI technology.
Industry observers say the development reflects growing competition in AI-generated video, with companies around the world racing to build commercial alternatives to platforms such as OpenAI’s Sora and Runway. Experts believe Kling AI’s rapid growth is indicative of how AI video generation is evolving from an experimental tool to an independent business category with significant commercial potential across entertainment, advertising, gaming, and digital content production.
