Kuaishou shares fall after Tencent joins $2.8 billion raise for Kling AI subsidiary

Kuaishou Technology shares were trading lower Friday after the company announced a capital injection of almost $2.8 billion for its artificial intelligence subsidiary, Kling AI, including backing from tech giant Tencent. The Beijing-based short video platform disclosed the funding details in a regulatory filing released after the market closed on Thursday. The company was targeting a valuation of $15 billion from the raise, Bloomberg reported. Kuaishou shares rose more than 5% at Friday's Hong Kong market open but later dropped into negative territory, trading 0.1% lower. Tencent, which owns the generative AI platform Hunyuan, a domestic rival to Kling AI, is investing $200m as part of the funding round, which raised a total of 19 billion yuan ($2.79 billion). The deal will dilute Kuaishou's stake to 68%. Beyond Tencent, the funding round drew a broad consortium of backers, including 21 independent investors. CNBC previously reported on the hype and intense competition surrounding China-based AI video generators, with Kling AI increasingly targeting growth outside its home market Kling AI serves as a core creator studio offering AI-driven features and claims to reach more than 60 million creators globally after launching in June 2024. Kuaishou is China's second most popular short-video platform, with a reported 700 million monthly active users spending more than 130 minutes per day with its services.