General Atlantic in talks to lead $2B round for Kling AI

General Atlantic is in talks to lead the first funding round for Kuaishou spinoff Kling AI, which aims to raise over $2 billion, according to Bloomberg.bloomberg
Kling AI trimmed its target valuation from $20 billion to $18 billion to match investor appetite, with other Asia-focused firms also expressing interest.bloomberg
The pre-IPO round would mark a rare major U.S. investment in a Chinese AI company; Kling AI plans to file for a Hong Kong listing in early 2027.kr-asia

Kuaishou’s Kling AI Seeks Over $2 Billion in First Funding Round With General Atlantic

Kuaishou Technology is in discussions with General Atlantic to lead a first round of financing for its video-generation AI unit Kling AI, seeking more than $2 billion at a post-money valuation of $18 billion, Bloomberg reported on Monday.bloomberg

The deal would mark a rare instance of a major American investment firm backing a Chinese AI company amid ongoing tensions between Washington and Beijing over technology. General Atlantic, a New York-based growth equity firm, is in talks to spearhead the round, though discussions remain at an early stage with no certainty a transaction will be completed on the proposed terms.itiger

Trimmed Expectations

Kling AI had initially held discussions with investors about financing at a $20 billion target valuation but trimmed those expectations to match market appetite, according to people familiar with the matter cited by Bloomberg. The unit, which generates videos and short films from text prompts, has also drawn initial interest from other Asia-focused investment firms.bloomberg

The Wall Street Journal reported in May that Kuaishou was in talks with potential investors including Tencent Holdings to raise $2 billion for the Kling unit ahead of a spinoff. Reports at the time indicated Kling AI had reached a $500 million annualized revenue run rate.wsj

Path to Hong Kong IPO

The fundraising is being positioned as a pre-IPO round. Internal plans call for Kling AI to submit listing application materials for a Hong Kong initial public offering in early 2027. At its targeted $18 billion pre-money valuation, the unit would be worth roughly two-thirds of parent Kuaishou’s market capitalization.binance

Kling AI competes in the rapidly growing AI video generation space against rivals including tools developed by OpenAI and ByteDance. The platform reportedly serves more than 60 million creators and 30,000 enterprise customers globally.linkedin

The potential investment by General Atlantic underscores how some US firms continue to pursue opportunities in China’s AI sector despite geopolitical headwinds. Discussions are ongoing, and terms could still change before any agreement is finalized.itiger