Kling AI sells 1.14% to China's state AI fund for 1.4bn yuan

Kuaishou's video generation unit has sold a stake in itself to China's national artificial intelligence fund, the clearest sign yet of how the state is financing the country's rush into AI film. Beijing Kling Technology, the company behind Kling AI, signed joinder agreements on August 31, 2026 with China Artificial Intelligence Industry Investment Fund Partnership and with Charoen Pokphand Robot, according to Kuaishou Technology's announcement to the Hong Kong stock exchange.

The filing puts the fund's subscription at RMB1.4 billion for about 1.14% of Beijing Kling's enlarged registered capital, and Charoen Pokphand Robot's at approximately $19.29 million, or about RMB131.45 million, for about 0.11%. EVTV Miami converts the larger sum to about $197 million. Both investors were granted redemption rights, and Kuaishou said the subscription limit was fully used. TechNode reported that the filing updates Kling's ownership structure after the unit's spinout from Kuaishou.

The filing gives the stakes but no valuation. Divided out, 1.4 billion yuan for 1.14% implies about 122.8 billion yuan, and 131.45 million yuan for 0.11% implies about 119.5 billion yuan, which is arithmetic on disclosed figures rather than a price either side has stated. Kuaishou said in July that the video generation unit was seeking around $3 billion in external funding, according to EVTV Miami.

The output side has its first regulatory milestone. China's National Film Administration has granted a public-screening licence to "Sanxingdui: Future Memories", a 90-minute science fiction film that Reuters describes as the first AI film produced by a major Chinese studio to receive regulatory approval for theatrical release in China. Bona Film Group, the producer, said the film is due to be released this year. Reuters reported the licence in a report carried by Kyodo News.

Cities are bidding for the studios. Shanghai introduced measures in May to accelerate AI micro-drama production, offering computing power and cloud-based AI models to cut costs and support overseas distribution, and Beijing has a 260 million yuan fund for audiovisual technology, with its Huairou district giving producers of short AI dramas vouchers against their computing bills, according to Reuters. Shenzhen offers technical support for video production, visual effects and content generation, plus subsidised rent; its wider 4.5 billion yuan ($630 million) package for AI and robotics, announced in February 2025, includes computing vouchers covering up to 60% of a company's bill and capped at 10 million yuan, according to China Daily.

The cost curve is why filmmakers take the offers. The price of producing an AI short drama fell from 5,000 yuan, about $747, per minute to a few hundred yuan during the first half of 2026, according to the state broadcaster CCTV, and Pan Xiaojun, a postgraduate film-directing student in Hainan, told Reuters that a wedding scene that would cost 60,000 yuan to shoot conventionally takes 1,400 yuan with AI. Volume has followed the discount. Reuters reports that "there are signs that AI video content may already be approaching overcapacity", citing DataEye's count of 221,900 new AI shows launched on Douyin in the first half of 2026, of which 1,055 passed 100 million views. SLOP TV News ran those figures when the report landed.

Distribution is following the money. iQIYI chief executive Gong Yu said in August that the platform is "all-in" on AI, and it is offering subsidies to some creators whose AI content streams there, according to Reuters. The push has also drawn resistance. Reuters reports that Chinese actors have raised concerns about the use of their likenesses in AI films, fuelling worries about copyright infringement and job losses for voice actors, that consumers complain of plagiarism and a lack of originality, and that the unexpected box-office success of the conventionally made, crudely animated "Niu Lai" was seen by some as a backlash against AI content. China requires explicit labelling for AI-generated content but has yet to introduce clear copyright rules for it.

For creators outside China the money is the signal rather than the technique. A national fund taking 1.14% of a video generation business, city vouchers against computing bills and a film regulator clearing an AI feature for cinemas add up to a market being built to a price that other markets will be measured against. If the film performs at the box office, the argument for funding AI features anywhere gets easier to make. China's AI film output is not staying inside China either. Reuters reports that director Cao Yiwen premiered her AI-animated film at the World AI Film Festival in Cannes in April, and she said she thought China was taking the lead, adding that "France and the rest of Europe are still watching and waiting to see whether China will introduce clear laws".

The next test is a box office. Bona Film Group says "Sanxingdui: Future Memories" is due for release in China this year.