Beijing's Zhipu AI Secures US$210 Million to Bolster Investments in Generative AI Start-Ups

Zhipu AI's Strategic Venture Fund

Zhipu AI, one of China’s leading generative artificial intelligence (GenAI) start-ups, has announced the initial closing of its venture capital vehicle, the Zhipu Ecosystem Fund. This fund aims to invest in related start-ups to strengthen the company's ecosystem, borrowing a page from ChatGPT owner OpenAI.

Funding Details and Partners

The Zhipu Ecosystem Fund, also known as the Z Fund, raised 1.5 billion yuan (US$211 million) from its parent company and a group of state-backed and private entities, according to a statement published Friday on its official WeChat account. Notable participants include:

• Shijingshan District Modern Innovation Industry Development Fund from Beijing
• Fuzuo Capital, affiliated with Hangzhou Industrial Investment Group
• Yanbei Capital, a private equity fund
• Guangdong Aofei Data Tech, a cloud computing provider

Zhipu AI's Competitive Landscape

As competition intensifies in China’s crowded GenAI market, with over a hundred large language models (LLMs) emerging, Zhipu AI is ramping up its investment strategies. Known as one of China’s four AI Tigers, Zhipu is recognized as a frontrunner in competing with prominent US entities, including OpenAI and Anthropic.

Investment Focus and Portfolio

Valued at approximately 20 billion yuan, Zhipu’s investors include major players like Alibaba Group Holding and Tencent Holdings. The focus of the Z Fund mirrors that of the OpenAI Startup Fund in the US, concentrating on early-stage start-ups across various sectors such as healthcare, education, and energy. Since initiating operations, the fund has invested in at least 10 start-ups, including SiliconFlow and Shengshu AI, aiming to exploit both upstream and downstream opportunities in the GenAI landscape.