Beijing-based AI startup Moonshot AI has raised over $1 billion series B in a recent funding round, catapulting the company to a valuation of $2.5 billion amid strong investor interest in China's homegrown AI innovators.
The round was led by e-commerce titan Alibaba and prominent VC firm HongShan, formerly the Chinese arm of Sequoia Capital, and also included participation from leading Chinese super app Meituan and social commerce platform Xiaohongshu. This marks the largest single investment into a Chinese AI startup following the debut and meteoric rise of ChatGPT creator OpenAI.
The company was founded less than a year ago (march 2023) by 31-year-old AI luminary Yang Zhilin, a Carnegie Mellon PhD graduate formerly with Google Brain and Meta AI. Moonshot is focused on developing large language models capable of processing vastly more text than existing systems.
The startup launched its first product Kimi AI (formerly known as Kimi Chat) last October – an AI chatbot powered by Moonshot's proprietary large language model which can supposedly process over 200,000 Chinese characters. This enables more nuanced conversations spanning longer texts like legal briefs or literature.
While an impressive feat, it is dwarfed by Google's announcement earlier this week that Gemini 1.5 Pro has a context window of 1 million tokens and that it has achieved up to 10 million in their research. Similarly, Magic AI (recently valued at $145 million) has boasted a 5 million context window for its LTM-1 since last year.
Moonshot also faces homegrown competition, notably from search pioneer Wang Xiaochuan’s Beijing-based Baichuan AI which claims its model handles 350,000 Chinese characters. But Moonshot’s tech pedigree and backers position it strongly in the race to lead China’s exploding AI sector.
The mega-round coincides with receding global investor enthusiasm, yet Chinese tech giants are still eager to ally with promising homegrown AI startups as national regulation keeps Western players like Google and OpenAI out. The involvement of Alibaba and HongShan, alongside other significant players like Meituan and Xiaohongshu, indicates a broad-based confidence in Moonshot AI's potential to lead and innovate within the AI space. However, they have also spread bets across players like Baichuan and Zhipu AI.