Zhipu AI, a Chinese AI startup, obtained 500 million yuan ($69.04 million) in funding from state-owned Huafa Group. Just earlier this month, they announced a separate 1 billion yuan capital raise.
State media Zhuhai Special Economic Zone Daily reported Huafa Group’s investment in Zhipu on Thursday. Huafa Group, a state conglomerate based in Zhuhai in Guangdong province, announced the investment in recent days as Chinese cities compete to back promising AI startups. Beijing views this sector as crucial in its technology rivalry with the United States.
The funding follows a 1 billion-yuan funding round announced earlier this month with major investors like Hangzhou. Hangzhou City Investment Group Industrial Fund, a state-backed entity, participated in that funding round. Hangzhou is also home to rival DeepSeek.
DeepSeek recently emerged and its large language models have garnered attention. They purportedly match Western competitors’ capabilities at lower development costs.
Founded in 2019, Zhipu AI is widely known as one of China’s “AI tigers.” According to business registration platform Qichacha, tech giants Tencent, Meituan and Xiaomi have invested in the company across more than 15 funding rounds.
Qichacha reported that the company was valued at 20 billion yuan in a funding round in July 2024.
The Zhuhai Special Economic Zone Daily stated that the new capital will be used “to advance technological innovation and ecosystem development of its GLM foundation model.”
In January, the U.S. Commerce Department added Zhipu and its subsidiaries to its export control entity list. This bars them “to procure U.S. components.”
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