Chinese artificial intelligence developer Zhipu has raised more than 2.5 billion yuan, or $342 million, from investors since the start of the year.

The company announced the fundraising milestone today. Alibaba Group Holding Ltd. and Tencent Holdings Ltd., China’s two largest tech firms, participated in the round. They were joined by handset maker Xiaomi Corp., food delivery provider Meituan and several others. 

Zhipu reportedly spun out of China’s Tsinghua University in 2019. The company is led by Tang Jie, a professor at the university’s computer science department. It’s focused on developing large language models similar to GPT-4, the artificial intelligence that powers OpenAI LP’s ChatGPT chatbot.

The company reportedly offers a chatbot of its own called Qingyan. It has also developed two open-source large language models, GLM-130B and ChatGLM-6B, that feature 130 billion and 6 billion parameters, respectively.

Parameters are the configuration settings that determine how an AI processes data. Some of those settings, like the number of artificial neurons a language model includes, are defined manually by developers during the coding phase of an AI project. Other parameters are set by the neural network itself during the training phase.

AI models with a large number of parameters can generally perform more advanced tasks than their smaller counterparts. However, neural networks with a limited parameter count have the advantage of being considerably more hardware-efficient. Zhipu says ChatGLM-6B, the smaller of its two open-source language models, can run on a consumer-grade graphics card.

The company’s funding announcement comes a few days after Baichuan, another Chinese AI startup, disclosed that it has secured a $300 million investment. The raise included contributions from many of the same companies that backed Zhipu, including Alibaba, Tencent and Xiaomi. Baichuan is now reportedly worth more than $1 billion.

The startup, which was founded this past April, competes with Zhipu in the large language model market. It has so far built four open-source language models and two proprietary ones. Baichuan provides its neural networks through application programming interfaces that developers can use to build tools such as customer support chatbots.

Zhipu and Baichuan join a strong of other AI startups that have raised funding since the start of the year. Last month, Amazon.com Inc. announced plans to invest up to $4 billion in OpenAI rival Anthropic, which develops an AI chatbot called Claude. Earlier, Paris-based Mistral AI raised $113 million in funding to build large language models. 

Recent reports suggest that OpenAI could soon sell shares as well. On Wednesday, sources told Bloomberg that the AI developer may hold a secondary sale at a valuation of $86 billion. The Wall Street Journal earlier reported that the deal could value OpenAI at as much as $90 billion. 

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