Alibaba, Tencent among investors in Zhipu, China’s OpenAI rival

Chinese technology giants including Alibaba and Tencent are among backers of Zhipu, the company said on Friday, an artificial intelligence start-up the country is hoping can be an answer to American firm OpenAI.

Zhipu has raised more than 2.5 billion Chinese yuan ($341 million) this year, the company said in a statement.

Sequoia and Hillhouse are among the high-profile venture backers, and smartphone maker Xiaomi, Alibaba and Tencent are some of the corporate investors.

Zhipu is one of China’s promising start-ups creating AI models trained on huge amounts of data that can underpin various applications. In August, Zhipu released a generative AI chatbot based on its models. Generative AI refers to technology where the AI is able to generate answers in response to user prompts.

OpenAI is the U.S. firm behind ChatGPT, the AI chatbot that arguably brought the technology into the mainstream.

Zhipu’s statement about its investors comes at a time when the technology battle between the U.S. and China continues to ramp up with artificial intelligence front and center.

China sees AI as a key technology that it wants to develop, especially since it could help economic output. The world’s second-largest economy plans to increase its computing power by 50% by 2025, which would help continue to develop AI applications.

However, the U.S. has looked to cut China off from key technologies required to develop AI models. Last year, the U.S. introduced rules that restricted Nvidia from selling its top-end A100 and H100 graphics processing units to China. This month, Washington tightened those rules to cover more Nvidia chips. Nvidia is the market leader in graphics processing units, a type of semiconductor that helps to train AI models that require huge amounts of data processing.

Zhipu is among a number of Chinese startups trying to help the country’s AI industry grow. Many of these young firms are backed by China’s technology giants.

Baichuan, another AI startup said this week it had raised around $300 million from investors including Alibaba and Tencent.

Meanwhile, Alibaba, Tencent and Baidu, are all developing their own AI models and releasing products underpinned by this technology.