Alibaba backs $2.8 billion firm in third major AI deal of 2024

Alibaba Group Holding Ltd. has participated in new financing of 5 billion yuan ($691 million) for Chinese startup Baichuan, inking its third major AI deal this year as the e-commerce firm looks beyond its core business for growth.

Baichuan is valued at 20 billion yuan after securing funding recently from Beijing, Shanghai and Shenzhen governments, the startup said in a statement on Thursday.

They were joined by existing investors include Tencent Holdings Ltd. and Xiaomi Corp.

Founded in April 2023, Baichuan is a leader in the generative AI space in China, one of the first batch of Chinese firms to win Beijing’s approval for public rollout.

The Beijing-based startup has released 12 large language models and debuted an AI assistant in May, according to the statement.

Founder Wang Xiaochuan, who named his startup after the Chinese phrase for “a hundred rivers,” told Bloomberg News last year that China may need years to catch up with the U.S.

Baichuan’s Chinese peers MiniMax and Moonshot AI also saw their valuations swell past $2 billion earlier this year after receiving support from Alibaba.

The e-commerce operator joins Silicon Valley peers such as Microsoft Corp. in placing big bets on generative AI.