Chinese artificial intelligence (AI) startup Zhipu has secured over 1 billion yuan ($140 million) in a new funding round led by state-backed firms.
The round, which attracted investments from Hangzhou Municipal Construction Investment Group Co. and Shangcheng Capital—both controlled by the government of Hangzhou—also included existing backers Alibaba Group Holding Ltd. and Tencent Holdings Ltd.
The latest financing values Zhipu at approximately $3 billion, reflecting rising confidence in its AI capabilities amid escalating competition with U.S. tech giants such as OpenAI and Meta Platforms Inc.
In a statement on its official WeChat account, Zhipu disclosed the names of its new investors but did not provide further financial details.
The funding is expected to accelerate the development of its AI models and expand its market footprint both domestically and internationally.
Zhipu’s latest funding round comes on the heels of rising interest in China’s AI sector following the debut of DeepSeek’s advanced AI model in January.
The rapid rise of DeepSeek has intensified AI competition in China, prompting developers from Alibaba to Baidu Inc. to fast-track enhancements to their large-language models.
According to Zhipu’s statement, the company plans to unveil new AI models this year and make them open-source, a move seen as part of a broader strategy to gain market dominance and attract a wider developer community.
“We will unveil new models this year and open-source them,” Zhipu stated.
The investment also comes despite mounting geopolitical challenges, including Zhipu’s recent addition to the U.S. Commerce Department’s trade-restriction blacklist in January. The blacklisting threatens to limit Zhipu’s access to advanced U.S. technologies, potentially hindering its development of next-generation AI systems. Zhipu has denied any links to the Chinese military, insisting that its operations are fully compliant with international regulations.
Analysts believe the backing from Alibaba and Tencent, coupled with state support, could help Zhipu mitigate the impact of U.S. sanctions and maintain its AI development trajectory.
“With Alibaba and Tencent on board, Zhipu has both the financial muscle and cloud infrastructure capabilities needed to compete aggressively in the AI space,” a tech analyst told Investors King. “The state-backed funding also signals Beijing’s strategic focus on achieving self-reliance in key technologies.”
