Kuaishou Technology shares rose nearly 7% Friday before trimming gains, after the company announced a capital injection of nearly $2.8 billion into its artificial intelligence subsidiary, Kling AI, with backing from tech giant Tencent.

The Beijing-based short video platform disclosed the funding details in a regulatory filing released after the market closed on Thursday. The company was targeting a $15 billion valuation from the raise, Bloomberg reported.

Kuaishou shares rose as much as 6.89% at Friday's Hong Kong market open. The stock closed down 0.09% at HK$42.60. Hong Kong's Hang Seng Index closed up 1.28%.

Tencent, which owns the generative AI platform Hunyuan, a domestic rival to Kling AI, is investing $200 million as part of the funding round, which raised a total of 19 billion yuan ($2.79 billion). The deal will dilute Kuaishou's stake to 68%.

Beyond Tencent, the funding round drew a broad consortium of backers, including 21 independent investors.

CNBC previously reported on the hype and intense competition surrounding China-based AI video generators, with Kling AI increasingly targeting growth outside its home market

Kling AI serves as a core creator studio offering AI-driven features and claims to reach more than 60 million creators globally after launching in June 2024.

Kuaishou is China's second most popular short-video platform, with a reported 700 million monthly active users spending more than 130 minutes per day with its services.