Chinese AI start-up Baichuan raises US$700 million from Alibaba, Tencent, Xiaomi

The Beijing-based company is now worth more than US$2.7 billion, behind only fellow ‘AI tiger’ Moonshot AI, as US capital remains sparse in the domestic industry

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Baichuan Intelligent Technology founder Wang Ziaochuan previously founded Sogou, once China’s second-largest search engine. Photo: Weibo/量子位

Published: 9:30pm, 25 Jul 2024Updated: 10:37pm, 25 Jul 2024

Baichuan AI, one of China’s four so-called artificial intelligence (AI) tigers, raised about 5 billion yuan (US$687.6 million) in a new funding round that valued the start-up at more than 20 billion yuan, the company said on Thursday.

The Beijing-based firm’s latest round was backed by some of the biggest names in Chinese technology, including Alibaba Group Holding, Tencent Holdings and Xiaomi, along with some state-backed funds. Alibaba owns the South China Morning Post.

China International Capital Corporation, the AI industrial investment fund backed by the municipal governments of Beijing and Shanghai, as well as Shenzhen Capital Group, one of the largest yuan-denominated venture funds set up by the southern tech hub’s government in 1999, are among the participants.

The sizeable funding round illustrates how local investors continue to pump money into the red-hot AI industry at a time when US funds are steering clear amid geopolitical uncertainty.

Founded in April 2023 by Wang Xiaochuan – founder and former CEO of Sogou, once China’s second-largest search engine operator after Baidu – Baichuan has seen its valuation swell past US$2.7 billion in a matter of months, becoming China’s second-most valuable AI start-up behind crosstown rival Moonshot AI, valued at US$3 billion and also backed by Alibaba.

China’s biggest e-commerce and cloud services operator has emerged as one of the most prolific backers of Chinese AI start-ups, with stakes in all four AI tigers, which also includes Beijing-based Zhipu AI and Shanghai-based MiniMax.