The Beijing-based artificial intelligence startup Baichuan Intelligent Technology today said it has raised 5 million yuan ($691 million) in new funding from major Chinese technology giants Alibaba Holding Ltd., Tencent Holdings Ltd. and smartphone maker Xiaomi Corp.

The company is now valued at more than 20 billion yuan ($2.7 billion) according to a report from Bloomberg. Baichuan also secured additional investments from the Beijing government’s AI Industry Investment Fund, Shanghai AI Industry Investment Fund and Shenzhen Capital Group.

The company was founded in April 2023 by Chief Executive Wang Xiaochuan, former chief executive of Sogou, once China’s second-largest search engine after Baidu Inc. Baichuan has become a prominent AI developer in the Chinese through its work on generative AI and large language models in competition with Microsoft Corp. and OpenAI. The core team includes numerous AI experts from major tech companies such as Google LLC, Tencent, Baidu, Huawei, Microsoft and ByteDance.

Baichuan became one of the first companies to earn regulatory approval to release large language models in China and began with the rollout of its Baiuchan2-53B commercially. Since launch, it has released more than 12 LLMs, including Baichuan-7B, Baichuan-13B and Baichuan4, and introduced its AI assistant Baixiaoying in May 2024.

At its release in May, the company said that its namesake LLM, Baichuan 4, outranked the most popular LLMs at the time, including OpenAI’s GPT-4 and Anthropic PBC’s Claude 3 Opus in the latest SuperCLUE testing when it came to measuring AI model Chinese proficiency. The company also said its Baixiaoying chatbot stood out against local rivals such as Baidu’s Ernie bot and Moonshot AI’s Kimi in its ability to “search like a professional.”

The company said it intends to develop its AI chatbot app into a “super app” that will touch all aspects of a person’s life, similar to Tencent’s WeChat combined social media, messaging, payments and e-commerce service. “The path to artificial general intelligence will be driven by both a powerful LLM and a super app,” Wang said at the time.

The Chinese AI market continues to see significant native investor interest as China has been rushing to catch up with the United States, especially companies such as OpenAI, Anthropic, Cohere and other startups rapidly pushing out LLMs. The difficulty getting advanced chips required to train and deploy AI runtime given restricted exports from the U.S. to China has hampered the country’s AI development. That means chips must be fabricated in the country or imported from other regions.

With this funding, Baichuan’s valuation is just behind rival Moonshot AI, valued at $3 billion, which also received backing from Alibaba. As one of China’s largest e-commerce and cloud services operators, Alibaba has been pouring money into AI companies across the country, including LLM developer Zhipu and AI character role-playing app developer startup MiniMax.

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