Valuation of $20 billion? Will Kuaishou spin off KeLing AI?

Author | Huang Yu

Kuaishou may be looking for a more aggressive capital channel for its most prominent AI asset.

On May 11, market reports said that Kuaishou plans to spin off its AI video generation platform—Keling AI—for a listing in 2027, seizing capital opportunities amid the current surge in investments in AI concept stocks. Related reports indicate that Kuaishou has been in talks with potential investors regarding pre-IPO financing for Keling, with the valuation of this round set at $20 billion.

Kuaishou has not yet responded publicly to this.

Video generation large models are widely recognized as “money-consuming beasts,” facing heavy pressure from high compute requirements. Spinning off Keling AI may be the most realistic financial line of defense Kuaishou can take during the stage when its large-model initiatives are consuming massive capital.

A most typical example is that in March 2026, just two years after it went live, OpenAI announced that Sora—an AI video generation tool that had sparked a global race—would exit the historical stage.

This means that the video generation sector faces formidable challenges, and even global AI frontrunners find it hard to withstand such a money-burning project.

The commercial return on AI products has already been placed in a very important position. As for Keling AI, it seems to have made relatively faster progress in monetization.

In 2025, Keling AI’s total revenue reached RMB 1.04 billion, which is equivalent to about $150 million. As of January 2026, Keling AI’s annualized revenue run rate (ARR) has exceeded $300 million.

Kuaishou Technology’s founder and CEO Cheng Yixiao also previously said that, based on the current growth momentum and commercialization progress, the company remains highly confident that in 2026 Keling AI will achieve year-over-year revenue growth of more than double.

In 2026, when global capital is scrutinizing generative AI as it moves into the investment return phase, there is not much of a window left for Keling AI to build its competitive barriers.

You have to know that the competitive landscape Keling AI faces is also becoming more crowded than ever.

Currently, Keling AI and comparable products from giants such as ByteDance, Google, and Alibaba are carrying out direct and intense competition.

Facing the dual challenges of commercialization and improving technical capabilities, Kuaishou undoubtedly needs to invest more capital.

Kuaishou is also continuously increasing investment. It is expected that in 2026 its overall Capex spending will reach about RMB 26 billion. The additional RMB 11 billion investment made in 2025 will mainly be used to support compute capacity for Keling’s large model and other foundational large models.

As the user base continues to grow larger in the future, Keling AI’s compute pressure will also keep increasing.

However, compared with those giants, if Kuaishou relies only on cash flow from its short video business to bankroll Keling, it is obviously at risk of a shortage of funding.

Therefore, by pushing Keling to the front stage of the capital market, Kuaishou not only transfers the high R&D costs, but also locks in the highest valuation premium during the AI bubble period.

For both Kuaishou and Keling AI, this spin-off may be not just a hurdle in raising capital, but also an important battle over the ultimate question of how to commercialize AI large models.

Risk Warning and Disclaimer

        There are risks in the market; invest with caution. This article does not constitute personal investment advice, nor does it take into account any individual user’s special investment objectives, financial situation, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article align with their specific circumstances. You assume responsibility for any investment made on the basis of this.