Kuaishou Closes a Record $2.9 Billion Round for Kling AI, With Alibaba, Tencent and Baidu on the Cap Table

Kuaishou Technology said on Monday that the capital increase for its AI video generation business, Kling, has officially closed, with investors paying in a total of RMB 19.802 billion — roughly $2.9 billion — in a filing to the Hong Kong Stock Exchange. The company billed it as the largest single round of financing ever completed in the AI video sector, and the paper trail behind it says as much about where the market is heading as the headline number itself.

After the closing, Kuaishou and its affiliates hold 66.68% of Kling's equity and 52.45% of its voting rights, keeping the video generator firmly under the parent's control. The marquee new investors took deliberately small positions: Alibaba holds 1.38%, a Tencent vehicle called Shanghai Qishan holds 0.56%, and Baidu holds 0.28%. None of the three giants is trying to steer Kling; they are buying exposure to the fastest-scaling video model business in China at a moment when access matters more than control.

The most revealing clause sits at the bottom of the announcement. If Kling has not completed an IPO by October 2031, investors can demand that Kuaishou buy back their shares at the principal plus 8% annual simple interest. In effect, the exit price is written into the deal document. Structured downside protection of this kind was rare in the venture boom years; its appearance here signals that even the most sought-after AI asset in Chinese video is being priced with a defensive floor attached.

The operating numbers behind the round are strong enough to justify the froth. Kuaishou disclosed that Kling generated more than RMB 850 million (about $120 million) in revenue in the second quarter alone, up more than 200% year over year. That puts Kling on an annualized run rate approaching half a billion dollars, generated mostly from subscription tiers for video generation — a monetization profile most Western video-model startups, which lean heavily on API credits, have not matched.

For Alibaba, Tencent and Baidu, the logic is defensive as much as offensive. All three operate their own generative video efforts, but Kling has established itself as the default consumer brand for AI video in China since launching in mid-2024. Owning even a sliver of the category leader — and keeping a channel into its distribution — is cheaper than conceding the segment outright. The same dynamic appeared earlier this year when the three companies converged on other AI infrastructure assets rather than funding rivals to them.

The buyback clock also quietly sets the sector's timeline. An October 2031 IPO deadline implies investors expect AI video to be a mature, listable business within five years, and that Kuaishou — which spun Kling out into a separately capitalized unit precisely to prepare it for the public markets — is serious about getting there. With $2.9 billion of fresh capital, a documented path to listing, and revenue compounding at 200%, Kling is now the closest thing China's AI video race has to a scheduled public-market debut.