Chinese tech giant Tencent has joined a major funding round for Kling, the AI video-generation unit of short-video company Kuaishou, according to CNBC.
CNBC reports that Tencent is part of a $2.8 billion raise for the Kling AI subsidiary. The Decoder puts the figure slightly differently, reporting that Kuaishou has raised about $2 billion from investors for its AI video division.
According to The Decoder, the fundraising comes as Kling gears up for a Hong Kong initial public offering — a sign the company is positioning the unit for public markets rather than keeping it fully inside the parent business.
Investor reaction was not uniformly positive. CNBC reports that Kuaishou shares fell after news of Tencent joining the raise. That kind of drop can happen when shareholders worry about how a capital-hungry AI unit will be funded, or how a potential spin-off might affect the value they hold in the parent company.
Kling is one of a growing crop of tools that generate video from text prompts, an area drawing heavy investment across the industry. The involvement of Tencent — one of China's largest technology firms — signals continued appetite among the country's biggest players to secure positions in generative AI video.
Why it matters: the deal shows how China's tech heavyweights are pouring billions into AI video and preparing these units for public listings, even as investors weigh the costs against the promise.