General Atlantic is negotiating to lead a $2 billion financing round for Kling AI, the video generation unit of Chinese tech giant Kuaishou, according to Bloomberg. The deal would value the business at $18 billion post-investment, down from an initial $20 billion target. Talks remain preliminary with no guarantee of completion.

Kling's rapid growth has drawn investor interest. Annual recurring revenue climbed to $500 million in March from $300 million in January, driven by Kling 3.0's launch. First-quarter revenue reached $96.2 million, more than tripling year-over-year. The unit's performance helped lift Kuaishou shares by as much as 8.9% in Hong Kong.

The financing comes amid geopolitical headwinds. Beijing recently ordered Meta to unwind its $2 billion acquisition of AI startup Manus, citing sensitive technology concerns. Cross-border AI deals face increasing scrutiny from both Chinese and US regulators. General Atlantic's involvement adds intrigue given its early ByteDance backing and stakes in Meta and Uber.

Kling competes with ByteDance's Seedance and emerging players like Shengshu, targeting professional filmmakers and advertisers. With OpenAI's Sora no longer active, Chinese AI video tools are filling the global monetization gap. The fundraising supports Kuaishou's restructuring ahead of a planned 2027 IPO. This marks Kling's emergence as a serious competitor in the AI video generation space.