China's four new AI tigers emerge as investor favorites

A group of artificial intelligence (AI) start-ups are emerging as China’s best hopes for reaching the frontier of ChatGPT-like technology, as they draw increasing attention from users and investors. Among them, Baichuan is the latest to complete a new round of fundraising, reported to be about USD1.8 billion. That puts the Beijing-based company in a league of domestic AI unicorns – start-ups valued at more than USD1 billion – that also include Zhipu AI, Moonshot AI and MiniMax. The group has been dubbed locally as the “four new AI tigers of China”, in contrast to the four “old” AI dragons – SenseTime, Megvii, CloudWalk Technology and Yitu Technology – which focused mostly on facial and image recognition technologies. Since Microsoft-backed start-up OpenAI debuted ChatGPT in late 2022, Chinese Big Tech firms and start-ups alike have been racing to draw users to their generative AI services, which are capable of creating content, such as text, images, video and audio. About 200 large language models (LLMs) – the technology underpinning generative AI services – have been launched in China so far, according to government figures.

Baichuan was founded a year ago by Wang Xiaochuan, Founder of Sogou – once the largest rival of Baidu before being sold to Tencent Holdings. The venture, which develops its own LLMs, is led by a team that includes Wang’s long-time aide and former Sogou Chief Operating Officer, Ru Liyun. To date, Baichuan has released three versions of its eponymous AI models, the latest of which the company said had surpassed OpenAI’s most advanced GPT4 model in Chinese language capability, citing multiple benchmark tests. Baichuan announced last October that it raised USD300 million from backers including Tencent, Xiaomi and Alibaba Group.

That same month, Zhipu AI – also based in Beijing – said it had raised CNY2.5 billion since the beginning of 2023 from state-affiliated investors, Alibaba, Tencent, food-delivery platform operator Meituan, as well as venture investors including GL Ventures and HongShan. The money raised would be used to further develop its foundation models and build an industry ecosystem, Zhipu AI said at the time. By that point, it was valued at more than USD1.3 billion. Zhipu AI was founded in 2019 to build on research from the Knowledge Engineering Group of Tsinghua University. The start-up’s Chief Executive, Zhang Peng, graduated with a doctorate from Tsinghua’s computer Science Department.

The two other new tigers – Moonshot AI and MiniMax, founded in 2023 and 2021, respectively – both saw their recent valuation rise to roughly USD2.5 billion. Moonshot AI, another start-up based in Beijing, raised USD1 billion in a funding round in February. Its flagship Kimi chatbot, built on its self-developed LLM and upgraded last month, can process 2 million Chinese characters in a single prompt. MiniMax, based in Shanghai, is looking to raise at least USD600 million in a new round led by Alibaba that would value the company at more than USD2.5 billion, the South China Morning Post reports.