Interpretations of Shambhala’s Significance
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The Kalachakra texts themselves do not specify what happened to the Shambhala kingdom. Tibetan commentators take up several interpretations. Some suggest that the entire kingdom of Shambhala became enlightened through the practice of the Kalachakra tantra and has become a pure realm in which beings can take rebirth. Another view specifies that Shambhala is a pure realm on this earth, visible only to those with perception purified in meditation. The text does specify that Shambhala is “behind Mount Kailash.” This has been taken by some Tibetan commentators to mean “north of Kailash,” while some Tibetans believe Shambhala is actually “inside” Mount Kailash. The Dalai Lama once joked that since Shambhala lies due north of India, perhaps it refers to North America, reached by traveling north over the top of the globe!
Tibetan traditions also comment on the identity of the Rigdens. Many Tibetans believe the Dalai Lama to be an emanation of the Rigden king. The Shambhala terma tradition sees the Sakyongs as directly connected to the Rigden, and that the Rigden signifies the inherent strength and brilliance of the mind, the principle at the basis of enlightened society. Ju Mipham, the previous incarnation of Sakyong Mipham Rinpoche, was said to comment at the time of his death that he would seek rebirth in Shambhala. As the Kalachakra texts are of Indian origin, they do not mention the lha or drala deities; the connection of these to Shambhala and the Rigden principle came out of the visionary experiences and texts produced by the Dorje Dradul
Source
{https://shambhalatimes.org/2018/10/28/shambhala-in-the-kalachakra-tantra/}