I.T. News – Dec 23, 2024

1 - China's GenAI sector sees more funding, fewer deals in sign of consolidation, data shows

South China Morning Post. Dec 18, 2024.

China's generative artificial intelligence (GenAI) sector has seen more funding but fewer deals so far this year, as investors become more picky amid overcrowding in the market, according to industry data.

The Chinese GenAI industry had struck 113 deals as of December 18, around 20 per cent fewer than the 143 last year, according to data compiled by Itjuzi.com, a start-up database service.

However, total funding amounted to 35 billion yuan (US$4.8 billion) this year, compared with 20.5 billion yuan last year, meaning investors are more selective as they grow wary of the crowded market amid uncertainties over monetisation of new AI products.

The four leading Chinese AI start-ups of Beijing-based Zhipu AI, Moonshot AI, and Baichuan, as well as Shanghai's MiniMax - collectively known as the Chinese AI Tigers - raised a total of around US$2.1 billion this year, according to company statements and media reports, accounting for almost half of the total funding that went into the Chinese GenAI market this year.

Zhipu AI announced its fourth financing round this year on Tuesday, adding US$412 million to its war chest as the company branches out to fend off competition in the market, where a total of 252 GenAI services ranging from AI chatbots to AI-powered bespoke industry solutions have been approved by Chinese government.

In line with the declining deal-making trend in the sector, fewer new GenAI services are entering the market.

The Cyberspace Administration of China, the national internet watchdog, gave the green light to 64 new GenAI services in its latest regulatory approvals in November, the smallest of the three batches it approved this year, in a sign of saturation in the market.

The broader AI market, which includes AI infrastructure and technology start-ups that develop semiconductors or software used to train GenAI services, as well as firms that build industrial solutions, also saw investment levels cool off this year, according to Itjuzi data.

The overall Chinese AI market has seen 457 deals so far this year, a drop of around 23 per cent from last year's 595.

2 - Chinese start-up Zhipu AI raises US$412 million in new funding amid crowded market

South China Morning Post. December 17, 2024.

China's artificial intelligence (AI) start-up Zhipu AI said on Tuesday that it has raised 3 billion yuan (US$412 million) in a new funding round, beefing up the firm's war chest as it braces for stiffer competition in the market.

The new financing adds to a funding spree that has seen Zhipu secure four investment rounds so far this year from a long list of marquee backers, from state-backed investment vehicles to Big Tech firms such as Alibaba Group Holding and Tencent Holdings, as well as prominent venture capital funds Qiming Ventures and Legend Capital. Alibaba owns the South China Morning Post.

Zhipu did not disclose its valuation after the latest financing. It was valued at 20 billion yuan after its previous financing round in September, led by Beijing Zhongguancun Science City Innovation Development, a state-backed investment vehicle.

Zhipu's new funding comes as it has intensified efforts to expand its offerings to fend off domestic competition. Its services include AI solutions for businesses and a versatile chatbot, capable of handing text inquiries and generating images and videos, that caters to individual users and charges for premium access.

Zhipu said it doubled its revenue year on year from January to November, without providing an exact figure.

Zhipu was among the Chinese AI firms engaged in a price war earlier this year to offer discounted application programming interface (API) services for third-party companies to build their AI applications. Selling API access is one way local and foreign AI firms have monetised their services.

Zhipu charges a 39 yuan

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