China's Kling AI raises $2 billion to expand AI video generation

Chinese video AI developer Kling AI, spun out of Kuaishou Technology, has raised a first funding tranche of $2 billion, Bloomberg reports. The round ranks among the largest investments in AI-powered generative video and should speed up the expansion of the company's operations.

What is Kling AI

Kling is a model that generates video from text prompts and images; Kuaishou unveiled it in 2024. The model quickly earned a reputation as one of the world's strongest for image quality and physically plausible object motion, and it became a showcase for Kuaishou's AI ambitions well beyond its original short-video business.

The parent company is one of China's largest short-video operators and a direct rival to ByteDance's Douyin, the Chinese counterpart of TikTok. Kuaishou's shares trade on the Hong Kong Stock Exchange. For Kuaishou, launching and scaling Kling was a strategic bet on generative AI as a new source of growth beyond its traditional advertising model.

Why the company needed new capital

Training and running modern video models takes enormous compute: tens of thousands of GPUs and hundreds of millions of dollars in data center infrastructure costs. Spinning Kling out as a separate business with its own funding round lets Kuaishou raise capital specifically for video AI without diluting the parent company's balance sheet.

• The first tranche of the round is $2 billion, according to Bloomberg
• Kuaishou Technology launched Kling in 2024
• The funds will go toward expanding the company's video AI operations
• Parent company Kuaishou competes with ByteDance (owner of Douyin/TikTok)

Who Kling competes with

Generative video has become one of the hottest segments of the AI industry, and Kling is far from the only contender for the lead. Its direct competitors include OpenAI's Sora, Runway, Google DeepMind's Veo, and Dream Machine from startup Luma AI, along with other Chinese efforts, including products from Alibaba. Video generated by these models is already used in advertising, film previsualization, social media content production, and game asset development — exactly the use cases Kling is counting on to monetize first.

Kling's round also stands out against the broader boom in investment in China's AI sector in recent years. Other Chinese labs have raised large rounds too, competing both with each other and with American heavyweights like OpenAI and Anthropic for talent, chips, and customers.

What it means

The $2 billion round shows that Chinese video AI developers are seriously competing with American labs for capital and compute. Generative video remains one of the most capital-intensive segments of the AI industry, and the scale of the investment in Kling is further evidence that the race to lead it is far from over.