(Yicai) May 12 -- Kuaishou Technology’s stock price gained after the Chinese short-video sharing platform revealed plans to bring in outside investors for its artificial intelligence video generation business, sparking media reports that the firm will spin off Kling AI as a separate unit.

Kuaishou [HKG: 1024] closed 1.9 percent higher at HKD52.60 (HKD6.72) per share in Hong Kong today, after opening up by nearly 10 percent.

The plan is still in the initial stages, the Beijing-based company said in an announcement to the Hong Kong Stock Exchange. Reports said Kuaishou is also planning a separate listing for Kling AI and is hoping to raise USD2 billion, with a valuation of USD20 billion. 

Kling AI is a generative AI creative studio developed by Kuaishou and launched in June 2024. According to Kuaishou’s 2025 financial report, Kling AI made CNY340 million (USD50.04 million) in operating revenue in the fourth quarter of last year, with over USD20 million in December, corresponding to an annualized run-rate revenue of USD240 million.

This January, ARRR rose to more than USD300 million, and monthly active users exceeded 12 million, but Kling AI’s income still accounts for less than 1 percent of Kuaishou’s total revenue. 

While Kling AI is believed to have huge potential, it is still in the early “cash-burning” phase, and concerns over capital expenditure overshadowed Kuaishou’s earnings conference this March. 

Chief Financial Officer Jin Bing said at the conference that capex is likely to reach about CNY26 billion (USD3.83 billion) this year, up around CNY11 billion from CNY14.5 billion last year, mainly due to the computing power requirements of Kling AI and other foundational models. 

As a short-video social platform, Kuaishou’s monetization still depends heavily on user scale and engagement time, but the growth of its traditional traffic-driven business hit a ceiling last year. In the first to fourth quarters, daily active users tallied 408 million, 409 million, 416 million, and 408 million, respectively, per its annual report.

Kuaishou’s e-commerce business, the firm’s main growth engine over the past few years, is also slowing. In the final three months of last year, e-commerce gross merchandise volume rose 13 percent to CNY521.8 billion, slower than gains made in the first three quarters.

Editor: Tom Litting