According to media reports, Kuaishou-W's (ASX: 01024) artificial intelligence unit, Kling AI, is close to finalizing a funding round of $3 billion, with TENCENT (ASX: 00700) participating as an investor.

Upon completion of this round, Kling AI's post-money valuation is expected to reach approximately $18 billion.

IPO Timeline and Fund Use

The report cites a source close to the transaction stating that Kuaishou plans to initiate the process for Kling AI's initial public offering in Hong Kong within the next twelve months.

Proceeds from the listing are intended to fund the expansion of computing power and data centers, as well as the recruitment and retention incentives for core technical talent.

Valuation Adjustment

The report further notes that when Kuaishou first planned to spin off the Kling AI business in April, the initial target valuation was set at $20 billion.

The latest valuation represents a decrease from that earlier target.

Company Response and Background

At the time of reporting, Kuaishou had not issued an official response to these developments.

News regarding Kuaishou's plan to spin off Kling AI and seek external funding initially emerged in mid-May.

Financial data shows that in the first quarter of 2026, Kling AI's operating revenue exceeded 6.5 billion yuan, marking a year-over-year growth of over 300%.

As of March 2026, Kling AI's annualized revenue run rate (ARR) was nearly $500 million.