According to individuals with knowledge of the matter, Kuaishou Technology is in discussions with General Atlantic for the U.S. investment firm to lead a first round of funding for its video artificial intelligence unit, aiming to secure backing from a major American investor ahead of a potential initial public offering.

Initial Funding and Valuation Details

Sources indicate that the AI division, Kling AI, plans to raise over $2 billion at a post-money valuation of $18 billion. The individuals stated that the Chinese company had initially discussed a target of $20 billion with investors but subsequently revised its expectations downward to align with market demand. The people added that Kling AI has garnered preliminary interest from several other investment firms focused on Asia. The sources requested anonymity as the discussions are private.

Status of Negotiations and Strategic Context

The negotiations are reportedly in early stages, and there is no guarantee a deal will be finalized on the current terms. If an agreement is reached, it would represent a notable investment by General Atlantic into China's competitive generative AI sector. This development comes at a time of heightened tensions between Beijing and Washington concerning this emerging technology. The American private equity firm is an early backer of ByteDance and is known for its early-stage investments in companies like Meta Platforms Inc and Uber Technologies Inc.