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 approximately US$2 billion in fresh financing ahead of a possible independent public listing in the coming years.
According to reports, Kuaishou has already started discussions with potential investors, including Chinese technology giant Tencent, as interest in AI-generated video platforms continues to surge globally. The spin-off would mark one of the largest financing rounds in the generative AI video sector and could significantly reshape how investors value AI-focused businesses in China.
Kling AI has rapidly emerged as one of China’s leading AI video generation platforms since its launch in 2024. The platform allows users to create realistic videos using text prompts and has gained popularity among creators, marketers, and businesses producing AI-generated content. Reports indicate Kling’s annualized revenue run rate recently reached approximately US$500 million, reflecting strong commercialization momentum in the AI video market.
Industry analysts believe Kuaishou’s decision to separate Kling AI is largely driven by valuation strategy. While Kuaishou is primarily valued as a short-video and e-commerce company, Kling AI could attract significantly higher valuation multiples as a standalone artificial intelligence business. Experts say the move mirrors a broader trend where large technology firms are increasingly spinning off AI units to unlock shareholder value and attract specialized investors.
The reports also triggered a strong reaction in financial markets, with Kuaishou shares reportedly rising as much as 10% following news of the potential spin-off. Analysts noted that Kling AI’s reported valuation would amount to nearly 70% of Kuaishou’s current market capitalization, highlighting the growing investor enthusiasm around generative AI technologies.
Industry observers say the development reflects the intensifying competition in AI-generated video, where companies worldwide are racing to build commercial alternatives to platforms such as OpenAI’s Sora and Runway. Experts believe Kling AI’s rapid growth demonstrates how AI video generation is evolving from an experimental tool into a standalone business category with major commercial potential across entertainment, advertising, gaming, and digital content production.
