Kuaishou's Kling AI just closed a round near $2.8 billion at an $18 billion valuation, backed by Alibaba, Tencent and Baidu. Two months ago the number attached to the same spinoff was $20 billion.
The headline out of Beijing this week wasn't really how much money landed in Kling AI's accounts. It was how much smaller the final price came in compared to what investors were told to expect. According to Bloomberg, Kuaishou confirmed on July 2 that backers had committed more than 19 billion yuan, roughly $2.8 billion, into its AI video unit at a $15 billion pre-money valuation. The round is capped at 20.45 billion yuan, close to $3 billion, once the remaining investors sign, which the South China Morning Post reports pushes the post-money price to about $18 billion.
That's real money. It's also a comedown. Back in May, when Kuaishou first signaled it would carve Kling AI into its own company ahead of a Hong Kong listing, the figure attached to that plan was $20 billion, a number reported at the time by the South China Morning Post and eWeek and one that sent Kuaishou's own stock climbing on the news. Two months and one actual funding round later, the price that investors were willing to sign checks against landed two billion dollars under that mark.
You don't need to read too much into a billion or two on a private valuation. But the gap is worth sitting with, because it tells you the market for AI video money isn't writing blank checks anymore, even for the company most analysts consider China's answer to Sora.
What makes the $18 billion figure defensible at all is the growth underneath it. Kling AI's annualized revenue run rate hit $500 million in March, up from about $240 million just three months earlier in December, according to figures cited by Reuters and picked up widely across Chinese tech coverage. First-quarter revenue came in at roughly 650 million yuan, close to $96 million, up more than 300% from a year earlier. J.P. Morgan analysts have projected the run rate could reach $1.3 billion by the first quarter of 2027. If that forecast holds, $18 billion works out to something closer to 14 times forward revenue, a multiple that looks almost restrained next to how AI infrastructure names have traded this year.
The investor list tells its own story. The round was co-led by CPE, Tencent and CITIC Securities, with Alibaba, Baidu, Alibaba Cloud and film studio Huace Film & TV among more than twenty other backers, according to reporting from TechNode and BigGo Finance. Tencent alone put in $200 million, notable given that Tencent runs its own video generation model, Hunyuan. Writing a check into a rival's product only makes sense if you think the market has room for one clear leader rather than five mediocre ones, and Tencent is betting Kling AI is that leader.
None of this happens in a vacuum. Kuaishou shares jumped after CNBC confirmed Tencent's participation on July 3, the clearest signal yet that the market reads this round as validation rather than dilution. The company is reportedly targeting a filing for a Hong Kong listing as early as 2027, and this funding round functions as the pre-IPO markup that sets the price public investors will eventually measure against.
Here's the thing worth watching over the next two quarters: whether Kling AI's revenue keeps compounding at the pace it just posted, or whether the $500 million run rate turns out to be a peak pulled forward by a wave of enterprise pilots. A markdown from $20 billion to $18 billion is a rounding error if revenue triples again by next spring. It's a warning sign if it doesn't.
Also read: Nvidia's Next AI Rack Just Slipped a Year and Wall Street Noticed • SK Hynix files to raise $28 billion in a Nasdaq listing built entirely on AI memory demand • Samsung's record AI chip bonus deal is tearing its own union apart
