Kuaishou shares fall after Tencent joins $2.8 billion raise for Kling AI subsidiary

Kuaishou raises 19 billion yuan ($2.79 billion) for its Kling AI subsidiary, which targets creators with AI-driven services.

The company was reportedly targeting a valuation of $15 billion from the raise, which drew $200 million from Tencent.

Kuaishou shares rose more than 5% at Friday's market open but later dropped into negative territory, trading 0.1% lower.

Kuaishou Technology shares were trading lower Friday after the company announced a capital injection of almost $2.8 billion for its artificial intelligence subsidiary, Kling AI, including backing from tech giant Tencent .

The Beijing-based short video platform disclosed the funding details in a regulatory filing released after the market closed on Thursday.

The company was targeting a valuation of $15 billion from the raise, Bloomberg reported .

Kuaishou shares rose more than 5% at Friday's Hong Kong market open but later dropped into negative territory, trading 0.1% lower.

Tencent, which owns the generative AI platform Hunyuan, a domestic rival to Kling AI, is investing $200m as part of the funding round, which raised a total of 19 billion yuan ($2.79 billion).

The deal will dilute Kuaishou's stake to 68%.

Beyond Tencent, the funding round drew a broad consortium of backers, including 21 independent investors.

CNBC previously reported on the hype and intense competition surrounding China-based AI video generators, with Kling AI increasingly targeting growth outside its home market Kling AI serves as a core creator studio offering AI-driven features and claims to reach more than 60 million creators globally after ...