20.38 billion, the largest single financing in the AI video sector is about to be born

On July 1st, according to Zhidx, the South China Morning Post reported, citing people familiar with the matter, that Kuaishou's video generation business, "Keling AI," is set to complete a round of financing worth $3 billion (approximately RMB 20.38 billion). After the investment, its valuation will reach $18 billion (approximately RMB 122.3 billion), a reduction of $2 billion from the initially set target valuation of $20 billion in April this year. Tencent participated in this round of financing for Keling AI.

The report stated that as competition in the Chinese AI video generation market intensifies, Keling AI is accelerating its independent financing and subsequent listing arrangements. A person familiar with the matter said that the latest valuation of Keling AI has been adjusted downward compared to the previous target, reflecting changes in the market's valuation expectations for Keling AI.

Kuaishou had previously disclosed relevant actions. On May 12th, Kuaishou announced in the Hong Kong Stock Exchange that it is evaluating a restructuring proposal for the Keling AI business, which may involve raising funds by introducing external investors.

Regarding the listing, a person close to the deal said that Kuaishou is expected to initiate the process for Keling AI to list in Hong Kong within the next 12 months. The funds raised through the IPO will be used for the construction of computing power and data centers, as well as talent recruitment and retention.

Keling AI is Kuaishou's core business in the field of AI video generation.

In March this year, Kuaishou announced that "Keling AI" had an annualized revenue of over $300 million (approximately RMB 1.2234 billion) based on its January revenue, and it is expected that the annual revenue of this business will double in 2026. A person familiar with the matter revealed that in the first quarter of this year, the revenue of "Keling AI" was $75 million (approximately RMB 509 million), with most of it coming from overseas markets, including North America.

As of the close of the Hong Kong stock market, Kuaishou's stock price was reported at HK$41.6 (approximately RMB 36), up 1.46%, with a total market value of approximately HK$179.999 billion (approximately RMB 155.92 billion). The current valuation of $18 billion for "Keling AI" is approximately 78% of Kuaishou's market value.

Kuaishou's stock price (Source: Tencent Stock Selection)

Conclusion: Keling AI May Take the Lead in AI Video IPO

From the news of spin - off financing in May this year to the near - completion of $3 billion in financing now, the capitalization process of Keling AI is becoming more and more clear. Although the latest valuation has been adjusted downward compared to the previous $20 billion target, the post - investment valuation of $18 billion still means that Keling AI has become one of the highest - valued independent projects in the domestic AI video generation market.

For Kuaishou, the spin - off financing and potential listing of Keling AI will also be an important attempt to re - evaluate the value of its AI assets outside its main short - video business.

This article is from the WeChat official account “Zhidx” (ID: zhidxcom), written by Jiang Yu and edited by Yun Peng. It is published by 36Kr with authorization.