Kuaishou Plans $20 Billion Spinoff of Kling AI Video Unit

Kuaishou Technology is evaluating a spinoff of its Kling AI video unit at a valuation of approximately $20 billion, according to reporting from South China Morning Post, The Information, and Caixin Global. The company confirmed the proposal in a Hong Kong Stock Exchange filing, stating it is "assessing a proposal to restructure Kling" while noting negotiations remain preliminary and no agreements have been signed.

The Restructuring Plan

Kuaishou is seeking roughly $2 billion in pre-IPO funding ahead of a planned 2027 Kling IPO. Tencent Holdings is among the investors being approached, according to The Information. A standalone Kling entity would give the AI video unit its own capitalization and allow institutional investors to take a direct position in AI generated video.

The confirmation arrived through regulatory channels. Kuaishou filed an acknowledgment with the Hong Kong Stock Exchange after market reports crossed the threshold requiring a formal response, which means the disclosure is obligatory rather than promotional.

Revenue Growth Behind the Valuation

Kling is running at an annualized revenue rate of $500 million, according to The Information. That figure is roughly double the platform's revenue rate before the Lunar New Year holiday earlier in 2026, indicating the acceleration is recent and steep.

The $20 billion target implies a multiple on revenue consistent with high growth AI infrastructure companies rather than traditional software. The enterprise revenue stream, spanning advertising production, animation, gaming, and film workflows, is what supports that multiple. Consumer subscription revenue alone would not justify the valuation.

The Stock Market's Response

Kuaishou shares surged as much as 10% on the Hong Kong Stock Exchange on May 12 before settling at a gain of 3.49%, closing at HK$53.4. The move reflects market confidence that separating Kling from the broader Kuaishou business would unlock value currently embedded in the parent company's stock.

Investor interest in AI video as a standalone category has grown steadily in 2026 as platforms move from demo usage to billing real enterprise clients. A defined IPO timeline gives funds a way to price and hold that exposure directly.

Kling's Scale in the Creator Economy

Kling has reached 60 million creators, 600 million videos generated, and more than 30,000 enterprise clients as of May 2026. The enterprise base spans advertising agencies, animation studios, gaming companies, and film production teams.

Enterprise penetration at that scale is what separates Kling from competing platforms with larger consumer audiences but thinner commercial revenue. Advertising and film production clients pay for volume and reliability at a level consumer subscriptions do not match.

Kuaishou's research division built toward this commercial position over several years. The VideoCanvas unified video generation system, developed by Kuaishou's Kling team alongside researchers from the Chinese University of Hong Kong, demonstrated the technical foundation before Kling's commercial expansion.

The Competitive Context

The spinoff plan arrives as AI video generation consolidates around a small number of platforms with real revenue. ByteDance suspended the global launch of Seedance 2.0 in March 2026 under copyright pressure from Hollywood studios, leaving a market gap that Kling and a handful of Western competitors are now absorbing.

A standalone Kling at $20 billion would rank among the most valuable AI video companies in the world. Runway, its closest Western competitor by filmmaker adoption, has not disclosed comparable revenue figures publicly.

Kling for Filmmakers

The revenue and creator figures reflect what practitioners in AI film production have observed directly: Kling's motion quality, physics fidelity, and scene control have reached a level where they belong in production workflows, not just demonstrations.

Filmmakers working with Kling through the AI FILMS Studio video workspace can start with the Kling 3.0 and O1 video generation tutorial, which covers text-to-video, image-to-video, and start and end frame generation. The Kling 3.0 Motion Control tutorial covers motion transfer from a reference video onto a new character, one of the platform's most used enterprise features.

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Sources

South China Morning Post | The Information | Caixin Global | TechNode