Chinese artificial intelligence startup Zhipu AI recently secured 500 million yuan ($69.04 million) in funding from state-owned Huafa Group. This funding comes shortly after the company announced a separate 1 billion yuan capital raise. Huafa Group, a state conglomerate based in Zhuhai, Guangdong province, has invested in Zhipu, according to state media outlet Zhuhai Special Economic Zone Daily. This move reflects the increasing competition among Chinese cities to support promising AI startups, a sector that Beijing considers crucial in its technology rivalry with the United States.
In a related development, Hangzhou, the home of rival company DeepSeek, was a major investor in a 1 billion-yuan funding round through the state-backed entity Hangzhou City Investment Group Industrial Fund.
Zhipu AI, established in 2019 and recognized as one of China's prominent "AI tigers," has received investments from tech giants Tencent, Meituan, and Xiaomi in over 15 funding rounds. The company was valued at 20 billion yuan in a funding round in July 2024.
The new funding will be channeled towards advancing technological innovation and developing the ecosystem of its GLM foundation model, as stated by the Zhuhai Special Economic Zone Daily.
In January, Zhipu and its subsidiaries were added to the U.S. Commerce Department's export control entity list, preventing them from procuring U.S. components due to regulatory constraints.