Zhipu Raises $140M to Advance AI Innovation

Chinese AI startup Zhipu has successfully raised over 1 billion yuan ($140 million) in a financing round led by government-backed firms, reflecting China’s growing focus on domestic AI development following DeepSeek’s rise.

• Investors include:
  • Hangzhou Municipal Construction Investment Group Co.
  • Shangcheng Capital
  • Existing backers Alibaba Group and Tencent Holdings
• The startup was last valued at $3 billion in May 2024.

DeepSeek Sparks Renewed Interest in China’s AI Sector

Since DeepSeek’s debut in January 2025, China’s AI industry has witnessed accelerated investment and competition:

• DeepSeek’s AI model has been recognized for outperforming Western AI models at a fraction of the cost.
• Major tech giants like Alibaba and Baidu are rushing to enhance their large-language models (LLMs).
• Baidu is reportedly planning to issue 10 billion yuan ($1.4B) in offshore bonds to finance AI research.

U.S. Trade Sanctions Pose Challenges for Zhipu

Despite the investment boost, Zhipu faces restrictions from the U.S. Commerce Department, which added the company to its trade-restrictions blacklist in January:

• The move could limit Zhipu’s access to key AI technologies.
• The company denies any military links, reaffirming its focus on commercial AI development.

Zhipu’s Future Plans: Open-Sourcing AI Models

Looking ahead, Zhipu aims to unveil new AI models in 2025 and open-source them, a move that could:

• Increase adoption among developers and enterprises.
• Enhance China’s AI self-sufficiency, reducing reliance on foreign technology.

China’s AI Race Intensifies

With state-backed funding and major tech players investing in AI, China is rapidly positioning itself as a global AI powerhouse.

• Zhipu’s funding underscores Beijing’s push for AI leadership despite U.S. trade barriers.
• The competition between DeepSeek, Zhipu, Alibaba, and Baidu is reshaping China’s AI landscape.

As AI innovation continues to surge, Zhipu’s next steps could further solidify China’s role in shaping the future of artificial intelligence.