Shares of Chinese short-video giant Kuaishou (1024-HK) experienced a significant surge, climbing nearly 7% at Friday's Hong Kong market open before paring gains, following the announcement of a substantial capital injection into its artificial intelligence subsidiary, Kling AI. The funding round, which successfully raised 19 billion yuan (approximately $2.79 billion), saw backing from tech behemoth Tencent (80700-HK) and a consortium of 21 other independent investors.
Kuaishou, a Beijing-based company and China's second most popular short-video platform boasting 700 million monthly active users, disclosed the intricate funding details in a regulatory filing made public after Thursday's market close. According to a Bloomberg report, the company had set an ambitious target valuation of $15 billion for its Kling AI subsidiary through this raise.
Kuaishou headquarters is pictured on November 5, 2020, in Beijing, China.
VCG | Visual China Group | Getty Images
Tencent, a notable rival in the generative AI space with its Hunyuan platform, committed $200 million to the funding round. This significant investment will result in a dilution of Kuaishou's stake in Kling AI to 68%. The robust interest from a broad array of investors underscores the intense competition and excitement surrounding China's burgeoning AI video generator market, a trend previously highlighted by CNBC.
Kling AI, launched in June 2024, functions as a dedicated creator studio offering an array of AI-driven features designed to empower content creators. The subsidiary claims to have already reached a user base of over 60 million creators globally, demonstrating its rapid growth and strategic importance within Kuaishou's ecosystem. Kuaishou's platform itself sees users spending an average of over 130 minutes per day, making its AI advancements crucial for maintaining engagement and attracting new talent.
(An interactive stock chart for Kuaishou Technology (1024-HK) showing recent performance would typically be embedded here, illustrating the immediate market reaction.)
While Kuaishou's shares initially soared following the news, reaching highs of 6.89%, they later pared most of those gains, closing Friday's trading session approximately 0.75% higher, indicating a cautious optimism among investors despite the successful fundraise.
