China Leads Global Surge In Generative AI Investment & Start-up Funding

51 generative AI start-ups raised about 100 billion yuan in the first half of this year, according to Zhidongxi, a Chinese research firm specialising in artificial intelligence.

China Leads Global Surge In Generative AI Investment & Start-up Funding

In the first half of the year, generative artificial intelligence (AI) investment in China increased significantly worldwide, claims a research report. Additionally, according to reports, China has the most funded start-ups in the industry.

51 generative AI start-ups raised about 100 billion yuan (US$13.8 billion) in the first half of this year, according to Zhidongxi, a Chinese research firm specialising in artificial intelligence. This is ten times more funding than the sector received in 2022.

The Zhidongxi report claims that during that time, 22 generative AI start-ups in China received funding as opposed to 21 in the US and 4 in the UK. Despite the fact that China had more generative AI start-ups, the report found that US businesses received more funding.

According to the report, 12 of the 18 generative AI companies that received funding totaling more than 100 million yuan (US$138,287) in the first half were from the US, while only three were from China.

After ChatGPT was introduced by Microsoft-backed OpenAI last year, China’s Big Tech companies and start-ups are scrambling to catch up with their counterparts in the US.

While developing their own large language models (LLMs), tech behemoths like Tencent Holdings, Baidu, and owner of the Post Alibaba Group Holding are also investing heavily in start-ups.

According to the Zhidongxi report, Tencent made investments in DeepLang AI, Light Year, and MiniMax during the first half.

The start-up Light Year, founded in February by Wang Huiwen, co-founder and former director of Chinese food delivery services giant Meituan, received the largest round of funding in China.
Before being acquired by Meituan late last month, the company reportedly raised more than 1.6 billion yuan in June from investors such as Source Code Capital and Tencent.

This month, well-known VC Lee Kai-fu, a former head of Google China, also unveiled his own generative AI start-up, Lingyi Wanwu. The organisation, led by former Baidu metaverse operations chief Ma Jie, plans to create its own LLM from the ground up, calling it “the most difficult path.”

The founder of the cybersecurity company 360 Security Technology, Zhou Hongyi, has suggested that government agencies and businesses adopt Long-Lasting Machines (LLMs) cautiously, which has increased interest in generative AI in China. To maintain their dependability, he advises keeping LLMs independent and distinct from already-existing businesses.

ChatGPT could be a curse for AI start-ups, according to Allen Zhu Xiaohu, managing partner at GSR Ventures, who asserts that it outperforms current functions. The CEO of Cheetah Mobile, Fu Sheng, criticised Zhu’s remarks as being “fearlessly ignorant” about the commercial potential of ChatGPT.