Chinese AI startups are receiving strong support from local investors, particularly from Alibaba Cloud. In fact, four of these startups have achieved unicorn status with substantial backing. These companies are focused on developing products not only for the Chinese market but also for a global audience.

These Chinese AI startups are rapidly creating large language models, and four of them have reached unicorn status within a short period. The absence of OpenAI has created an opportunity for local startups to flourish. More than 260 companies are aiming to replicate the success of Anthropic and OpenAI, with four startups estimated to have values ranging from $1.2 billion to $2.5 billion.

Chinese investors are providing significant support to Zhipu AI, Moonshot AI, and MiniMax, enabling them to hire top talent for the development of innovative AI products that can compete on a global scale.

Despite being surpassed by their US counterparts in terms of fundraising and technology, 262 Chinese startups are striving to create local alternatives for popular AI applications. The Chinese government is actively fostering a supportive regulatory environment with subsidies and tax incentives to drive growth in the AI sector.

Many AI startups are keeping their funding rounds confidential to gain a competitive edge, securing limited computing infrastructure and recruiting top talent. These startups collectively raised around $14.3 billion in the first fiscal quarter of the year, according to AI Juzi.

Leading the pack is Zhipu AI, now valued at $2.5 billion with 800 employees, following a recent successful fundraising round backed by Tsinghua University in Beijing. Among its offerings is a line-up of Yi models designed for the Chinese market, built on Llama, a free-to-use Meta product. Moonshot's chatbot Kimi, a strong competitor to Baidu’s Ernie Bot, garnered 12.6 million visits in March.

All four top startups have secured funding from Alibaba, the main supporter of AI startups following in the footsteps of Microsoft's backing of OpenAI. While global tech funds are dwindling and investors are fewer, Chinese startups have access to talent and computing resources. However, a chip scarcity may impede China's AI progress in the near future.