Kuaishou's Kling AI video-generation unit has raised $2.8 billion, with Alibaba and Tencent among the backers, a rare joint bet by China's two largest internet groups on a product housed inside a rival platform. The round ranks as one of the largest single fundraises for a Chinese generative AI product and lands squarely in the market segment now dominated by OpenAI's Sora and Google's Veo.
Kling AI is Kuaishou's text-to-video system, spun up over the past 18 months and marketed as a domestic alternative to Western video models. The unit has been steadily gaining traction with Chinese advertisers, studios, and short-video creators who cannot readily access Sora inside China.
The composition of the syndicate is what makes the deal unusual. Alibaba and Tencent compete head-on in cloud, payments, and content, and only rarely co-invest at scale. Their willingness to jointly capitalize a product owned by Kuaishou — itself a competitor to Tencent's video interests and to ByteDance — signals that both groups view credible domestic video generation as strategic infrastructure worth funding even at a rival.
Key facts
- 01Kuaishou's Kling AI closed a $2.8 billion fundraise, one of the largest capital injections into a Chinese generative AI product to date.
- 02Alibaba and Tencent, normally direct competitors across e-commerce, cloud, and social, both took part in the round.
- 03Kling AI sits inside Kuaishou, the short-video platform that competes with ByteDance's Douyin and TikTok.
- 04The deal underscores Chinese tech's push to field a domestic answer to OpenAI's Sora and Google's Veo in text-to-video.
For Kuaishou, the raise separates Kling's balance sheet from the parent company's advertising-dependent short-video business and gives the unit room to spend on training compute at a moment when Chinese labs are rationing Nvidia allocations and pivoting to Huawei Ascend and domestic silicon. Video generation is one of the most compute-hungry workloads in AI, with training runs measured in tens of thousands of GPU-hours per model iteration.
The competitive backdrop is a global text-to-video race that has moved from research demos to shipping product in under two years. OpenAI opened Sora broadly in late 2024, Google shipped Veo through its Gemini and Vertex AI surfaces in 2025, and Runway, Pika, and Luma have all released successive commercial models. Kling has been the most-cited Chinese entrant in that field, with side-by-side comparisons frequently placing it within striking distance of Sora on prompt adherence and motion coherence.
The $2.8 billion figure also lands in the context of a broader Chinese AI funding rebound. After a lull in late 2024, capital has returned to a short list of frontier-adjacent players — Moonshot, Zhipu, MiniMax, DeepSeek, and now Kling — with Alibaba in particular emerging as one of the more active strategic investors. Alibaba has separately backed model labs and is pushing its own Qwen family through Alibaba Cloud.
Tencent's participation is the more notable read. The company has historically preferred to build in-house, running its own Hunyuan model line and integrating AI into WeChat and its gaming portfolio. Writing a check into a Kuaishou-owned unit implies Tencent sees value in access and optionality on Kling's model — likely via cloud, licensing, or content-pipeline arrangements — that it cannot easily replicate internally on the same timeline.
Kuaishou has not disclosed a post-money valuation for Kling AI, the ownership structure that results from the raise, or whether the round includes provisions for a future spin-out or listing. The company also has not specified how the capital will be split between compute, talent, and product distribution. Details on those points will shape how directly Kling can pressure Sora on cost per generated second, the metric that increasingly decides which video model wins commercial workloads.
The regulatory frame in China remains a variable. Generative video sits inside Beijing's deep-synthesis and generative AI rules, which require content labeling, security assessments, and registration of foundation models. A well-capitalized Kling with two of the largest domestic platforms as shareholders is better positioned than most to absorb that compliance load, but it also concentrates regulatory attention on a single product.
The story to watch is whether $2.8 billion is enough to keep pace. Sora and Veo are backed by parent companies whose combined AI capex now runs into the tens of billions per quarter, and the compute gap between US and Chinese video labs is widening at the training frontier even as inference-side quality closes. Kling's fundraise buys time and independence; it does not, on its own, close that gap. What it does do is confirm that China's incumbents have decided video generation is a market they cannot afford to concede, and that they will fund a shared champion rather than each losing separately.
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