Baichuan AI, one of China’s four so-called artificial intelligence (AI) tigers, raised about 5 billion yuan (US$687.6 million) in a new funding round that valued the start-up at more than 20 billion yuan, the company said on Thursday.
The Beijing-based firm’s latest round was backed by some of the biggest names in Chinese technology, including Alibaba Group Holding, Tencent Holdings and Xiaomi, along with some state-backed funds. Alibaba owns the South China Morning Post.
China International Capital Corporation, the AI industrial investment fund backed by the municipal governments of Beijing and Shanghai, as well as Shenzhen Capital Group, one of the largest yuan-denominated venture funds set up by the southern tech hub’s government in 1999, are among the participants.
The sizeable funding round illustrates how local investors continue to pump money into the red-hot AI industry at a time when US funds are steering clear amid geopolitical uncertainty.
Founded in April 2023 by Wang Xiaochuan – founder and former CEO of Sogou, once China’s second-largest search engine operator after Baidu – Baichuan has seen its valuation swell past US$2.7 billion in a matter of months, becoming China’s second-most valuable AI start-up behind crosstown rival Moonshot AI, valued at US$3 billion and also backed by Alibaba.
China’s biggest e-commerce and cloud services operator has emerged as one of the most prolific backers of Chinese AI start-ups, with stakes in all four AI tigers, which also includes Beijing-based Zhipu AI and Shanghai-based MiniMax.
Alibaba is actively developing its own large language models (LLMs), as well, which include its proprietary Tongyi Qianwen series and the open source version called Qwen. The push comes as the Hangzhou-based tech giant seeks to entrench its position in what has become a highly competitive domestic AI market.
Qwen2 was ranked the world’s best performing open-source model by LLM community Hugging Face when it was unveiled just after its launch last month. Facebook owner Meta Platforms is now claiming that title for its Llama 3.1 model unveiled on Monday, underscoring just how fast the industry is moving.
Baichuan’s new funding round comes less than two months after it introduced in late May the latest iteration of its namesake LLM – the technology behind chatbots such as OpenAI’s ChatGPT. Alongside Baichuan 4, the company introduced a dedicated digital assistant with the aim of turning its Baixiaoying chatbot app into a super app that can encompass all aspects of a person’s digital life, à la Tencent’s WeChat.
