Chinese AI startup Baichuan raises $300 million from Alibaba, Tencent, others

HONG KONG/BEIJING (Reuters) -Chinese artificial intelligence (AI) startup Baichuan has raised $300 million from investors including Chinese tech giants Alibaba and Tencent, it said on Tuesday.

The company said on its WeChat account that the round followed an early $50 million angel round. The investors include smartphone maker Xiaomi and other investment firms, it added.

China's craze over generative AI has triggered a flurry of product and fundraising announcements from startups and tech giants, as the industry races to find a homegrown rival to Microsoft-backed OpenAI's ChatGPT. Investors have warned, however, that a shakeout is imminent as cost and profit pressures grow.

Founded by Wang Xiaochuan, founder of internet search engine Sogou Inc, Baichuan was one of the first companies to receive China's approval to release a public chatbot in late August.

Shunwei Capital, a venture capital firm chaired by Xiaomi's chief executive Lei Jun, participated in the capital raise, according to a source familiar with the matter.

Baichuan declined to comment. Shunwei did not immediately respond to a Reuters query for comment. Baidu on Tuesday unveiled the newest version of its generative AI model, Ernie 4.0, saying its capabilities were on par with OpenAI's pioneering GPT-4 model, but analysts cautioned the launch lacked major highlights versus the previous version.

(Reporting by Josh Ye in Hong Kong and Roxanne Liu in Beijing; Editing by Jason Neely and Emelia Sithole-Matarise)