US-China Tech War: Zhipu AI Raises $340 Million for AI Advancements Amid Chip Restrictions
In the ongoing tech war between the United States and China, China’s artificial intelligence (AI) sector is making significant strides independently. As major American companies like OpenAI and Anthropic continue to dominate the AI landscape, Chinese companies are determined to surpass them. Zhipu AI, a leading player in China’s AI industry, recently announced that it has secured a substantial investment of 2.5 billion yuan (approximately $340 million) this year.
Established in 2019 by Tang Jie, a renowned graduate from Tsinghua University, Zhipu AI specializes in creating foundation models. To maintain its competitive edge in the expensive race for AI supremacy, Zhipu AI is attracting funding from local investors. Interestingly, the company received the $340 million investment in yuan, deviating from the usual preference for USD funds. This shift is attributed to growing geopolitical tensions and the resulting digital gap between the US and China.
The timing of this announcement is crucial in the development of AI technology, as the Biden administration recently imposed further restrictions on the sale of Nvidia AI hardware. These restrictions have posed challenges to China’s ability to train broad language models. In anticipation of potential US semiconductor restrictions, Chinese AI businesses with significant financial resources have been stockpiling semiconductor supplies. They have spent hundreds of millions of dollars to secure these highly sought-after chips.
The executive order issued by President Joe Biden in August limited American investment in key Chinese innovation industries, including AI and semiconductors, with the aim of slowing China’s military development. However, this measure has also discouraged US venture capitalists from investing in delicate sectors in China.
In response to the new chip restrictions, China strongly criticized the Biden administration, stating that the measure “violates the principles of the market economy and fair competition,” according to a BBC report. As a result, some companies, including Sequoia Capital China, have opted to restructure their operations in China.
Despite these challenges, Zhipu AI has managed to secure investments from various prominent players in the Chinese internet industry. Surprisingly, even bitter competitors like Alibaba and Tencent have joined forces in supporting Zhipu AI. Notable venture capital firms, including HongShan, Shunwei Capital, Hillhouse Capital, and Legend Capital, have also invested in the company. This unity among Chinese internet giants is a notable development.
Zhipu AI has recently made significant advancements in AI technology. The company has open-sourced ChatGLM-6B, a multilingual conversational AI model trained with an impressive six billion training parameters. This model has the capability to execute inferences on a single graphics card designed for common use. Additionally, Zhipu AI has unveiled the GLM-130B open-sourced foundation model, which was trained on an astounding 130 billion parameters.
China’s AI sector is determined to thrive independently amid the ongoing US-China tech war. With companies like Zhipu AI making remarkable advancements, the competition in the global AI landscape is becoming more intense.
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