Kuaishou Technology's video generation unit Kling AI is in discussions with US private equity firm General Atlantic to lead a $2 billion funding round at a post-money valuation of $18 billion, according to Bloomberg reporting on June 17, 2026. The company initially sought a $20 billion valuation but trimmed expectations to match investor appetite. The funding would represent Kling AI's first major external financing round ahead of a planned 2027 Hong Kong IPO. Kuaishou's shares rose as much as 8.9% on the news, buoyed by the funding discussions and a broader rally in Chinese AI stocks.
Kling AI generates short-form videos and films from text prompts, positioning it to capture demand left by OpenAI's shuttered Sora service. The unit's commercial momentum is strong: annual recurring revenue grew to $500 million in March from $300 million in January following the Kling 3.0 launch. Q1 2026 revenue exceeded $96 million, up more than 300% year-over-year. The platform serves over 60 million creators and 30,000 enterprise customers. General Atlantic is a known early backer of ByteDance, Kling's larger rival, and has invested in Meta and Uber.
The deal comes amid heightened US-China technology scrutiny. In April 2026, China ordered Meta to unwind its $2 billion acquisition of Manus, a Chinese agentic AI startup, over concerns about technology loss. A General Atlantic investment in Kling AI—a Chinese generative video tool—at $18 billion signals continued appetite for China AI deals, but navigates geopolitical risk. For architects, Kling's valuation trajectory (down from $20B target) and ARR acceleration ($200M growth in 2 months) suggest investors are pricing both opportunity and regulatory uncertainty into China-focused AI video infrastructure.