Cover Story: Chinese AI Startups Make Gains in Challenge to U.S.-based OpenAI

Investors bet China’s Zhipu AI and MiniMax can overcome U.S. limits on advanced chips

Since OpenAI’s ChatGPT ignited a global frenzy for generative artificial intelligence in late 2022, China’s tech sector has been swept up in a stampede of investment focused on computational power and cutting-edge models. While a few dominant players have emerged, the road ahead for the industry remains fraught with challenges.

Five-year-old Zhipu AI, one of China’s earliest generative AI start-ups, is now valued at over 20 billion yuan ($2.7 billion) and backed by a diverse range of investors. Incubated by Tsinghua University, Zhipu AI debuted China’s first self-developed pre-trained large language model (LLM) in August 2022. The company, with nearly 1,000 employees, has 25 million users for its chatbot app, ChatGLM, and rakes in annual recurring revenue exceeding 10 million yuan. CEO Zhang Peng said Zhipu AI aims to become China’s version of OpenAI, with operations spanning both business and consumer sectors.

MiniMax, founded by veterans of AI technology developer SenseTime, launched the Chinese AI platform Glow in 2022, enabling users to create and interact with intelligent agents. The company also found success overseas with Talkie, which ranked fifth among the most-downloaded free entertainment apps in the U.S. in June. Caixin has learned that MiniMax now generates $70 million in annual recurring revenue from advertising and user subscriptions across three products — Talkie, Hailuo AI and Xingye AI.

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