Sand.ai Raises $200 Million To Challenge Kling and Seedance With Open-Source AI Video

In just ten months, Sand.ai, an early-stage AI startup from China, has secured $200 million in a Series A+ round, valuing the company at over $1 billion. Cornerstone Capital and Wangsu Science & Technology led the funding round, with several other investors, including Times Capital, Panlin Capital, Orient Securities Capital, Pudong Venture Capital, and Shanghai Guofang, also participating.

Sand.ai aims to challenge video generation leaders Kling and Seedance with its open-source approach. Founded in 2024 by Cao Yue, a former Microsoft Research Asia researcher, Sand.ai chose an autoregressive method for video generation, a strategy that was not popular at the time. The company released MAGI-1 as an open-source project in May 2025 and won the Physics-IQ video continuation benchmark.

Its MAGI-2 model, a 114-billion-parameter mixture-of-experts model, is cost-effective, creating a 10-second, 1080p video for around CNY 0.5. Sand.ai's product, VidMuse, reached $10 million in annual recurring revenue within two months. Additionally, Wangsu's CNY 300 million investment will focus on video inference at the edge with low latency, potentially exposing Sand.ai's technology to significant customers in China.

Though the AI video race is competitive, Sand.ai's independent, open-source, and cost-effective approach offers an attractive alternative for developers and brands seeking to avoid reliance on platforms like Kling and Seedance.