Key Points
- Zhipu AI secured 500 million yuan from the state-owned Huafa Group, following a 1 billion yuan funding round earlier this month.
- Zhipu AI, founded in 2019, has received investments from Tencent, Meituan, and Xiaomi.
- The company was valued at 20 billion yuan ($2.76 billion) in July 2024.
- In January, the U.S. Commerce Department added Zhipu AI to its export control list, restricting access to U.S. components.
Chinese artificial intelligence startup Zhipu AI has received 500 million yuan ($69.04 million) in funding from Huafa Group, a state-owned conglomerate based in Zhuhai, Guangdong province. This investment follows a 1 billion yuan capital raise earlier this month, as Chinese cities continue to back emerging AI companies amid growing technological competition with the United States.
The latest funding from Huafa Group was announced through Zhuhai Special Economic Zone Daily, reflecting China’s increasing emphasis on fostering AI innovation. This comes as Hangzhou, home to Zhipu’s competitor DeepSeek, also participated in a 1 billion yuan funding round via the state-backed Hangzhou City Investment Group Industrial Fund.
DeepSeek has recently gained attention for its large language models (LLMs), which are said to be cost-effective alternatives to Western AI technologies. The rivalry between Zhipu AI and DeepSeek highlights China’s strategic push to develop domestic AI solutions that compete with global leaders.
Founded in 2019, Zhipu AI is recognized as one of China’s “AI tigers” and has secured investments from tech giants Tencent, Meituan, and Xiaomi across more than 15 funding rounds, according to business registration platform Qichacha. The company was valued at 20 billion yuan ($2.76 billion) in July 2024. Zhipu AI plans to utilize the new funding to enhance the technological capabilities and ecosystem of its GLM foundation model, further solidifying its position in China’s rapidly evolving AI sector.
Despite its growth, Zhipu AI faces challenges on the global stage. In January 2024, the U.S. Commerce Department added Zhipu AI and its subsidiaries to its export control entity list, effectively banning the company from procuring U.S.-made components. This move is part of broader U.S. efforts to curb China’s AI and semiconductor technology advancements.
