Kuaishou Technology’s shares jumped as much as 10 per cent on Tuesday morning after reports that the Chinese short-video platform was raising new funding for its Kling AI unit at a US$20 billion valuation.

Kuaishou – often seen as a rival to ByteDance-owned Douyin in China – plans to spin off its video generation service, according to a report by Chinese technology news outlet The LatePost on Monday, citing anonymous sources.

The company is in talks with potential investors, including Tencent Holdings, to raise US$2 billion, according to the report. Kling currently has an annualised revenue run rate of US$500 million – about double what it was before Chinese New Year, the report said.

Kuaishou and Kling did not immediately respond to requests for comment.