Zhipu AI Secures $137 Million in Funding, Intensifying China's AI Race

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On Mon, 3 Mar, 7:00 PM UTC

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Chinese AI startup Zhipu AI raises over 1 billion yuan in fresh funding, highlighting the growing competition in China's AI sector and the increasing involvement of state-backed funds in the AI race.

Zhipu AI Secures Significant Funding

Chinese artificial intelligence startup Zhipu AI has successfully raised over 1 billion yuan ($137.22 million) in a fresh round of funding, marking a significant development in China's rapidly evolving AI sector 1. This funding comes just months after the company secured a substantial 3 billion yuan investment, underscoring the growing interest and competition in the Chinese AI landscape.

State-Backed Investors Lead the Way

The funding round was notably led by state-backed entities, including the Hangzhou City Investment Group Industrial Fund and Shangcheng Capital 2. This involvement of government-backed funds highlights the strategic importance China places on AI development and its ambition to become a major player in the global AI race.

Zhipu AI's Growth and Plans

Founded in 2019, Zhipu AI has quickly established itself as one of China's "AI tigers" 1. The company has completed an impressive 16 funding rounds to date, according to business registration platform Qichacha. Zhipu AI plans to utilize the new funds to enhance its GLM large language model and expand its AI ecosystem, with a particular focus on serving businesses in Zhejiang province and the Yangtze River Delta economic zone 2.

Intensifying Competition in China's AI Sector

The funding round comes amid intensifying competition in China's AI sector, particularly following the emergence of rival DeepSeek 1. DeepSeek has gained attention for its large language models that claim to match the capabilities of leading Western platforms such as OpenAI, but at lower costs. This development has disrupted the market dynamics for second-tier AI firms in China.

Hangzhou's Push to Become an AI Hub

The investment marks a significant move by Hangzhou City Investment Group's year-old industrial fund, highlighting the eastern Chinese city's ambition to establish itself as a major AI hub 2. Hangzhou, which is also home to DeepSeek, has been actively supporting artificial intelligence ventures through state-owned enterprises.

Zhipu AI's Future Plans

In response to the evolving AI landscape, Zhipu AI has announced plans to release a suite of new AI models under an open-source framework 2. This suite will include foundation models, inference models, multimodal models, and AI agents, demonstrating the company's commitment to innovation and competitiveness in the AI sector.

Backing from Tech Giants

It's worth noting that Zhipu AI also enjoys support from major Chinese tech companies. The startup's existing backers include Alibaba Group Holding Ltd. and Tencent Holdings Ltd., further solidifying its position in the Chinese AI ecosystem 3.

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