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Aug 28, 2024 547

Tencent joins $300m financing round for Chinese AI startup Moonshot

#global

"Tencent has joined a $300m-plus (2.14bn yuan) financing round for Chinese generative artificial intelligence (AI) startup Moonshot, raising the company's valuation to $3.3bn, reports Bloomberg."

Tencent has recently participated in a significant $300 million financing round for the Chinese generative artificial intelligence (AI) startup Moonshot, raising the company’s valuation to $3.3 billion, according to a report by Bloomberg. This investment is part of a broader trend among major Chinese tech giants like Tencent and Alibaba, who are increasingly investing in AI ventures to secure their positions in the competitive AI sector. Moonshot, founded in Shanghai in March 2023, is rapidly emerging as one of China’s leading AI startups, and this latest funding round saw participation not only from Tencent but also from Gaorong Capital and existing investor Alibaba.

The strategic investment in Moonshot aligns with the broader push by Chinese technology companies to establish a dominant presence in the AI market, particularly in response to developments like ChatGPT in the United States. Alibaba, which led a $1 billion funding round for Moonshot earlier this year, has been particularly active in supporting promising AI startups. Moonshot is among the “Six Little Dragons,” a group of rapidly growing Chinese AI startups that are collectively positioning themselves as China’s answer to OpenAI. Both Alibaba and Tencent have stakes in most of these startups, including companies like Baichuan and MiniMax, underscoring their commitment to fostering domestic AI innovation.

The involvement of major technology companies and venture capitalists in the Chinese AI sector is also driven by geopolitical factors. In 2023, China launched a $40 billion state investment fund for its semiconductor industry to bolster its AI development, a move seen as a response to U.S. restrictions on semiconductor exports to China. These restrictions were designed to limit Beijing’s ambitions in AI, prompting Chinese companies and the government to invest heavily in building a self-sufficient AI ecosystem. Tencent’s recent investment in Moonshot and its continued support for the “Six Little Dragons” reflect the broader efforts to accelerate AI development in China despite external challenges.