BlueFive joins Kling’s $3bn AI push

BlueFive Capital has co-led a near $3 billion funding round for Kling AI, marking one of the largest capital injections into a generative video company and giving the Abu Dhabi-based investment platform a prominent position in China’s fast-growing artificial intelligence race.

The financing values Kling AI at about $18 billion after investment and brings together a heavyweight group of backers including CPE, Guofang Investment, Tencent and CITIC Securities. The round is centred on Kuaishou Technology’s AI video-generation business, which has moved from an internal product initiative into a potential stand-alone growth company with global ambitions.

Kuaishou disclosed that investors are putting more than 19 billion yuan into Kling AI, with room for the round to expand further. The fundraising could reach about 20.45 billion yuan if additional investors are brought in within the permitted window. Kuaishou’s ownership of the unit is expected to fall from full control to roughly 68 per cent after the capital injection, allowing the parent company to retain majority control while bringing in strategic and financial shareholders.

The transaction places BlueFive among a small group of Gulf-based investment firms taking direct exposure to frontier AI assets outside the region. The platform, incorporated in Abu Dhabi Global Market, has been building its identity around private equity, asset management and strategic advisory activity, with a stated focus on sectors such as artificial intelligence, biotechnology and advanced computing. Its participation in Kling AI signals a broader shift in Gulf capital, from passive exposure to listed technology companies towards earlier and more concentrated stakes in fast-scaling AI platforms.

Kling AI has emerged as one of the more closely watched video-generation systems in China. Developed by Kuaishou, the tool creates short video clips, images and multimedia content from text and visual prompts. Its users include creators, advertisers, studios and social media operators seeking to lower production costs and shorten content cycles. The platform has benefited from Kuaishou’s deep experience in short-video distribution, editing tools and creator monetisation.

Revenue from Kling AI reached about 650 million yuan in the first quarter of 2026, more than four times the level recorded a year earlier. Annualised revenue has been estimated at about $500 million, reflecting rapid uptake from paying users and enterprise customers. The figures remain small compared with Kuaishou’s core social media and advertising business, but they show how generative AI tools are beginning to move beyond experimental use into commercial deployment.

The funding comes as Kuaishou weighs a restructuring that could eventually lead to a separate listing of Kling AI in Hong Kong. Such a move would allow investors to value the AI business apart from Kuaishou’s mature short-video operations, which face intense competition from ByteDance and other domestic platforms. A spin-off would also give Kling AI a clearer capital structure as it builds computing capacity, model development teams and overseas sales channels.

Competition in AI video generation has intensified sharply. Kling AI faces global rivals including Google’s Veo, OpenAI’s Sora, Runway and ByteDance’s video-generation tools. Each company is racing to improve realism, continuity, character control, prompt accuracy and production speed. The sector remains costly, as model training and inference require large-scale access to graphics processing units, cloud infrastructure and specialised engineering talent.

Kling’s appeal lies partly in its product cadence. Kuaishou has rolled out repeated upgrades, including its 3.0 model series, with improved multimodal inputs, image-to-video capability and higher-quality output for professional use cases. The service has also attracted attention for relatively accessible pricing, a key advantage in markets where creators and small businesses are testing AI video but remain sensitive to subscription and generation costs.

For Abu Dhabi, the investment fits a wider strategy of linking local capital with global technology platforms. The emirate has been expanding its financial centre, sovereign investment networks and AI ecosystem, while seeking stronger exposure to companies developing infrastructure and applications around machine intelligence. BlueFive’s role in the Kling round gives the city a visible connection to one of the largest AI media platforms in Asia.