Alibaba, Tencent join funding for Chinese AI high-flyer Baichuan

ALIBABA Group and Tencent have joined a US$300 million financing round for Baichuan, one of many Chinese artificial intelligence (AI) startups hoping to capitalise on a surge of interest in developing ChatGPT-like services.

Smartphone maker Xiaomi also participated in the early funding round for Baichuan, which started in April. Xiaomi co-founder Lei Jun’s Shunwei Capital also took part, according to a source. The company now employs more than 170 people, including engineers drawn from the ranks of Google, Huawei Technologies and Tencent, the company said.

Baichuan is one of the more prominent startups developing generative AI in China, hoping to compete with the likes of Microsoft and OpenAI. The country’s tech firms are pouring billions into training and developing AI services, mirroring a wave of activity now convulsing Silicon Valley. On Tuesday, Baidu’s billionaire founder Robin Li declared that his company’s large language model has caught up with OpenAI’s GPT-4, claiming the lead in the nationwide race.

Baichuan was among the first batch of Chinese firms to win Beijing’s approval for public rollout. It has since released four open-source large language models and is working on two proprietary platforms, it said. Two of its open-source models have been downloaded six million times.

Wang Xiaochuan, who named his startup after the Chinese phrase for “a hundred rivers”, said this year that China may need years to catch up with the US. 

The US-Chinese competition in AI has broader implications beyond dominance of technology. It is expected to transform a plethora of industries from transport to media and finance, potentially powering a phase of economic growth. The technology also has government and military applications that could affect an already tense Washington-Beijing relationship.

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That competition is clouded by US sanctions on Chinese access to the most advanced chips used to train and run AI models. Washington is tightening curbs on shipments of AI chips to the country, stoking that uncertainty. BLOOMBERG