A new collaboration between the East China University of Science and Technology (ECUST) and Chinese tech giant Baidu has developed an innovative BCI approach that marries brain-language output systems with AI large language models. Photo: Courtesy of Jin Jing

A number of Chinese artificial intelligence (AI) model start-ups have announced the completion of a new round of financing, a trend that industry observers said shows the fast-track development of the Chinese generative AI industry and the formation of a more mature tech ecosystem, which will help boost its commercial application. 

AI company Zhipu announced on Tuesday that it recently raised 3 billion yuan ($420 million) in a new round of financing. New investors include several strategic investors and state-owned capital, while existing shareholders such as Legend Capital continued to participate in the investment, news website thepaper.cn reported. 

According to the company, the financing has made Zhipu one of the first Chinese AI large language model (LLM) start-ups whose valuation exceeds 20 billion yuan and one of the highest-valued LLM companies in China. 

The new funds being raised will be used for the further research and development (R&D) of Zhipu's GLM series, enhancing its various abilities from answering questions and handling complicated reasoning to multimodal tasks. In August, Zhipu released its latest large base model GLM-4-Plus, which some said demonstrates visual capabilities similar to OpenAI's GPT 4o model.

In addition to Zhipu, a flurry of AI start-ups including Modelbest and Galbot also completed a new financing round recently, worth several hundred million yuan and 500 million yuan, respectively, according to media reports. Modelbest said that upon completing the financing, the company will further accelerate the commercialization of efficient large models, particularly in edge-side AI.  

Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences, told the Global Times on Tuesday that the financing wave mirrors the rapid growth of China's AI industry. "These investments have been directed into various aspects of AI development, including R&D of LLMs, AI infrastructure, AI data service and AI model application," Wang explained.

Industry observers said that abundant funding is crucial for China's AI industry to make tech breakthroughs and close the gap with advanced global players, as it will drive continuous innovation upgrades in homegrown LLMs and deepen the application of LLMs across more industries and scenarios.

Zhou Hongyi, founder and chairman of 360 Security Technology, told the Global Times on Tuesday that he believes that AI technologies, represented by LLMs, will drive new production and business models in traditional sectors such as manufacturing, agriculture, and services, creating greater value for society.

"In the future, China's economic growth potential will increasingly come from technology-driven industrial upgrades. Of these, AI will serve as a core engine to foster the development of new quality productive forces," Zhou noted.