Kuaishou Technology is in talks with General Atlantic to lead the first funding round for its video-generation AI unit, Kling AI, Bloomberg reported, citing people familiar with the matter. The company is seeking to bring on a major U.S. investor ahead of a potential initial public offering.

Shares of Kuaishou rose 6.3% in Hong Kong trading.

Kling AI is aiming to raise more than $2 billion at a post-money valuation of about $18 billion, according to the people. The company had initially discussed fundraising at a target valuation of $20 billion but later lowered its expectations to better align with investor demand, they said.

The platform, which generates videos and short films from text prompts in a manner similar to OpenAI’s now-discontinued Sora, has also attracted preliminary interest from several Asia-focused investment firms, according to the people.

Discussions remain at an early stage, and there is no certainty that a transaction will be completed on the proposed terms, the people said.

If the deal proceeds, it would mark a rare investment by General Atlantic in China’s highly competitive generative AI sector. The U.S. private equity firm, an early investor in ByteDance, Kuaishou’s larger rival, and a backer of companies such as Meta Platforms and Uber Technologies, would be investing in Kling AI at a time when technology-related tensions between Beijing and Washington remain elevated, according to the people.