Short Video Platform Kuaishou's AI Subsidiary, Zhi Neng AI, is About to Complete a $3 Billion Funding Round, Valuing the Company at $18 Billion Post-Investment

According to DynoMatic Beating monitoring, Kuaishou's AI video generation model "Koala AI" is about to complete a new round of financing of over $3 billion, with a post-investment valuation of $18 billion. A Middle Eastern background fund may lead the investment, with potential investors such as Tencent, Alibaba, and Sequoia on the list. It is expected to complete a restructuring and IPO application process in early 2027.

The split financing is driven by the dual pressure of computing power costs and the funding gap among industry giants. In the first quarter of 2026, Kuaishou's total revenue was $33.7 billion, a 3.4% year-on-year increase, but the adjusted net profit plummeted by 26.3% year-on-year to $3.37 billion, as AI R&D and capital expenditures dragged down the overall gross margin. Faced with industry giants investing hundreds of billions or even trillions in computing infrastructure, Kuaishou's revenue for the full year of 2025 was only $142.8 billion. The projected $26 billion in capital expenditure for 2026 has reached a financial bottleneck, making split financing the only solution for Koala AI's survival and Kuaishou's recovery.

In addition to financial pressure, intense technological and talent competition is also accelerating. After Koala's former CTO Zhang Di left and returned to Alibaba, he led the team to launch HappyHorse-1.0 in just 5 months, topping the Artificial Analysis leaderboard in both tracks and surpassing Koala 3.0. This demonstrates that the technological barrier of video models is rapidly diminishing with talent mobility.