Alibaba, Tencent and other major Chinese backers invest US$342 million in start-up Zhipu AI as this tech sector sees increased funding

Alibaba Group Holding and Tencent Holdings are among a band of prominent Chinese Big Tech companies and venture capital (VC) firms that have helped start-up Beijing Zhipu Huazhang Technology Co (Zhipu AI) raise a total of 2.5 billion yuan (US$342 million) this year, as investments continue to heat up in the country’s artificial intelligence (AI) sector.

The two Hong Kong-listed tech giants were joined by industry peers Ant Group, Meituan and Xiaomi Corp as investors in Zhipu AI, according to a brief statement posted by the start-up on its official WeChat account on Friday. Ant is the financial technology affiliate of Alibaba, owner of the South China Morning Post.

Zhipu AI’s other backers include Xiaomi co-founder and chief executive Lei Jun’s Shunwei Capital, GL Ventures, the VC arm of Hillhouse Capital and HongShan, the Chinese firm spun off from the former Sequioa Capital business, according to the statement.

The start-up’s valuation already reached US$1 billion by mid-September, up from US$500 million in July this year, after completing its Series B3 funding round in which Alibaba and Tencent took part, data from local business registry service QCC.com show.

Private sector investments in AI-related enterprises on the mainland have continued to expand, despite efforts by the US government to prevent China from gaining an edge in advanced technologies.