Alibaba Leads Record Deal to Create $2.5 Billion China AI Firm

(Bloomberg) — Alibaba Group Holding Ltd. led the largest single financing round for a Chinese artificial intelligence startup, the latest in a string of sizeable investments that suggest the e-commerce firm is again deploying capital in the hunt for growth.

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Alibaba joins Tencent Holdings Ltd. and Silicon Valley peers like Microsoft Corp. in placing big bets on generative AI, the technology that powers ChatGPT. It led a $1 billion funding round in Moonshot AI with existing backer Monolith Management, boosting the year-old firm’s valuation eight-fold to some $2.5 billion, people familiar with the deal said. They joined previous backers including the investment arm of food delivery giant Meituan and Hongshan, formerly Sequoia China, the people said, asking not to be identified discussing a private transaction.

Founded in March 2023, Moonshot AI is among the better-known startups developing generative artificial intelligence in China, hoping to eventually match the likes of OpenAI and Google. It rolled out its Kimi chatbot to the public last November and has since launched a platform for developers to build AI applications atop its model. Its valuation stood at just $300 million when it secured initial funding.

Moonshot AI declined to comment on the company’s fundraising details, which were first reported by local media including 36kr. Monolith confirmed its participation in the latest round, without details. Alibaba representatives didn’t respond to requests for comment.

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