Kling AI: How Kuaishou's Video Platform Spun Off a $15 Billion AI Business

Kuaishou / 快手 has long been known as one of China's largest short-video platforms, but in 2026 the company drew attention for a very different business — its generative AI video model, Kling AI / 可灵. What started as an internal tool for creators on the platform has become a standalone division with a billion-dollar valuation and growing international revenue.

From tool to standalone business

For full-year 2025, Kling AI's revenue reached RMB 10.4 billion (roughly $1.5 billion), and the company expects to more than double that figure in 2026. The trajectory backs up that expectation: annualized recurring revenue (ARR) crossed $300 million by January 2026 and had grown to roughly $500 million by April — a 108% jump in a single quarter. Q1 2026 revenue came in at approximately $96 million, up more than 300% year-on-year.

International audience as the primary growth driver

A telling detail: the majority of Kling AI's Q1 2026 revenue came from overseas markets, including North America — meaning the product is monetizing faster outside China than within it. As of the end of 2025, the platform served over 60 million creators worldwide who had generated more than 600 million videos. For a service competing in a market dominated largely by American products, that share of international revenue is a notable outlier.

Funding round and ambitions

In 2026, Kling AI raised $2.8 billion backed by Alibaba, Tencent and Baidu — meaning several of parent Kuaishou's largest technology rivals simultaneously took stakes in the company, itself an unusual move in the Chinese market. The division's valuation reached roughly $15 billion. In parallel, Kuaishou itself set 2026 capital expenditure at RMB 26 billion (about $3.76 billion), directed primarily at compute infrastructure, foundation models and AI agent deployment.

Why it matters for China's internet industry

Kling AI is an example of how a Chinese internet company, originally built around video recommendation algorithms, managed to convert its accumulated video-processing expertise into a standalone, high-margin, world-class AI product. Understanding how such internet platforms work internally, and how they make decisions to launch new business lines, is part of the China Tech Giants Expedition.

What it means for the market

The Kling AI case shows that generative video AI has already moved past being a demo technology and become a real revenue source — with an international audience willing to pay, which for Chinese tech products remains more the exception than the rule.

An unusual investor lineup

Alibaba, Tencent and Baidu participating in the same Kling AI funding round is unusual even by the standards of China's tech market, where these three companies have competed for years for the same audience and advertising budgets across different corners of the internet. This kind of joint capital participation signals that all the major players see generative video AI as strategically important enough that temporary cooperation with direct rivals is worth it for early access to a promising technology, rather than relying entirely on in-house development.

Why capital spending is so high

Kuaishou's stated RMB 26 billion capex for 2026 is primarily about compute capacity: training and running inference on video models requires multiples more GPU capacity than comparable text language models, and generating each individual video is a one-off compute load rather than a single upfront model training cost. That level of investment is only accessible to companies with an already-established cash flow from a core business — for Kuaishou, that's advertising revenue and e-commerce built on top of its short-video platform.

Sources

Financial data drawn from BigGo Finance, PR Newswire, Digital Applied and BestStartup.Asia.