Chinese AI Giant Zhipu AI Reaches $2.8 Billion Valuation with State-Backed Investment

Beijing's Zhipu AI Surges to $2.8 Billion Valuation

Beijing-based Zhipu AI, one of China’s four leading artificial intelligence (AI) “tigers,” has successfully closed a new funding round with a valuation estimated at approximately 20 billion yuan (US$2.8 billion).

This round was led by Beijing Zhongguancun Science City Innovation Development, a state-backed investment entity.

The infusion of funds, reportedly worth "billions of yuan," is set to bolster Zhipu AI's technological innovation and ecosystem development, specifically aimed at advancing its large language models (LLMs).

This investment underscores the continued investor enthusiasm for AI ventures in China, even amid geopolitical tensions and efforts by Washington to curb Beijing's technological advancements.

Strategic Growth and High-Tech Collaborations

Zhipu AI, officially known as Beijing Zhipu Huazhang Technology, is renowned for its GLM series of LLMs, which are pivotal to generative AI applications akin to OpenAI’s ChatGPT.

These models are among the most prominent AI tools used by enterprises in China, according to research firm IDC.

The latest round of financing highlights Zhipu AI’s significant role in the AI sector, even as global scrutiny intensifies.

The company has recently engaged in a strategic partnership with Chinese smartphone manufacturer Honor.

This collaboration aims to set up an AI large model joint laboratory in Beijing, with the objective of enhancing AI services across Honor’s device ecosystem.

Recent Technological Milestones

In July, Zhipu AI unveiled Ying, a text-to-video AI model that produces six-second video clips from text and image prompts in about 30 seconds.

This innovative development demonstrates Zhipu AI’s commitment to pushing the boundaries of AI capabilities.

The company also released an upgraded suite of models, including GLM-4-Plus and CogView-3-Plus.

These updates enhance its ability to process and generate diverse media formats, reflecting the company's progress in multimodal AI research.

The introduction of these advanced models highlights Zhipu AI's rapid technological advancements and its growing influence in the AI industry.

The Chinese AI Unicorns Race to 20 Billion Yuan Valuation

Zhipu AI’s valuation milestone aligns with the achievements of other major Chinese AI players, such as Baichuan, which recently raised about 5 billion yuan, and Moonshot AI, which achieved a valuation exceeding 30 billion yuan.

The company’s valuation surpasses 20 billion yuan, setting it apart as the first AI model enterprise in China to reach this benchmark.

This valuation places Zhipu AI among the elite “AI tigers,” alongside Moonshot AI and MiniMax, further solidifying its status in the competitive AI landscape.

Investor Confidence and Future Prospects

Zhipu AI’s latest financing round illustrates sustained investor confidence in AI startups despite external pressures.

Key investors include Alibaba Group Holding, Tencent Holdings, Meituan, GL Ventures, and Legend Capital.

Source: tracxn.com

The support from these major stakeholders, combined with strategic collaborations like the one with Honor, underscores the company's pivotal role in shaping the future of AI.

Beijing Zhongguancun Science City Innovation Development’s General Manager, Yao Hongbo, emphasised the strategic importance of this investment, stating,

"Zhipu AI is a key player in the AI ecosystem and our partnership will drive technological innovation and industry advancement."

A Pioneering Force in AI Innovation

The funding also marks a significant moment for Zhipu AI’s position in the broader AI landscape, following the competitive strides of other “AI tigers” like Baichuan and Moonshot AI.

With its valuation crossing 200 billion yuan, Zhipu AI leads the charge in China's AI sector, reflecting both the high stakes and immense potential within this rapidly evolving industry.

As the company continues to innovate and expand its technological capabilities, it remains at the forefront of AI development, contributing to China's growing influence in the global AI arena.