Kuaishou plans to spin off its video generation AI business, Kling AI, at a roughly $20 billion valuation, with Tencent among the investors in talks, according to a report by LatePost. The deal is not yet finalized.
LatePost also reports that Kling's annualized recurring revenue has reached $500 million, doubling since before the Chinese New Year and far exceeding Kuaishou's expectations. Earlier this year, Kuaishou had set a full-year revenue target of $60 million for Kling, but the business ultimately brought in $150 million.
Kuaishou has established an independent incentive structure and a dedicated option pool for Kling to compete with ByteDance, Alibaba, and other tech giants in the video generation race. The core Kling team has also become a prime target for poaching.
Kling currently ranks first in the iOS drawing and design charts in nearly 40 countries, including Brazil, Russia, and Singapore, and is one of the highest-grossing graphic design apps in South Korea and Russia.