China has more than just DeepSeek

In addition to DeepSeek, Darkside of the Moon, Zhipu AI, MiniMAX, and Baichuan Intelligence are also unicorn companies. Alibaba, Tencent and other Chinese Internet-related companies are financially supporting these AI startups, while Tsinghua University, Peking University, and the Chinese Academy of Sciences have become sources of talent.

China’s artificial intelligence (AI) startups continue to emerge. DeepSeek, which has released low-cost, high-performance generative AI, and Moonshot AI are growing stronger. Funds from large Internet companies and talents from academic institutions have provided support for the growth of “Chinese AI”, and the performance competition previously centered on American companies has ushered in a new situation.

On the evening of January 20, just about two hours after DeepSeek released its latest generative AI large language model (LLM) “R1”, another LLM developed in China was also released, sparking heated discussions among AI engineers around the world. This is the “Kimi k1.5” developed by Darkside of the Moon.

Dark Side of the Moon said that the reasoning ability of “Kimi k1.5” exceeds that of “Claude 3.5 Sonnet” of Anthropic in the United States, and its performance is comparable to the new model “OpenAI o1” released by OpenAI in September 2024.

Enterprise valuation reaches 3.3 billion US dollars

Dark Side of the Moon was founded in 2023. Its founder Yang Zhilin is from Tsinghua University in China. He obtained a doctorate degree from Carnegie Mellon University in the United States and started a business in Beijing. According to local media reports, technicians who have worked on generative AI development at Google in the United States and Huawei in China have also joined the company.

According to data from CB Insights, a US research company, as of January, the enterprise valuation of Dark Side of the Moon has reached 3.3 billion US dollars.

In China, in addition to Dark Side of the Moon, Zhipu AI, founded in 2019, MiniMAX, founded in 2021, and Baichuan AI, founded in 2023, are also well-known as major unicorns (unlisted companies with a corporate valuation of more than $1 billion) and are competing to develop AI models.

Financial support for these AI startups comes from IT giants such as China’s Internet-related companies. Dark Side of the Moon raised $1 billion from Alibaba Group and others just one year after its establishment, and later received investment from Tencent Holdings. Zhipu AI, Baichuan AI, and MiniMAX have also received investments from Alibaba and Tencent.

Lee Ji-hye of Nomura Research Institute said, “Large IT companies can maintain their technological competitive advantage by cooperating with startups and introducing their products.” “For startups, in addition to obtaining financial support, they can also expand application scenarios and reach customers more conveniently by entering the ecosystem of large IT companies. It can be said to be a win-win relationship for both parties.”

Talents emerge in academic institutions

Academic institutions engaged in AI research, such as Tsinghua University, Peking University and the Chinese Academy of Sciences, have become a source of talent supply, which has also promoted the growth of AI startups.

The Nihon Keizai Shimbun (Chinese version: Nikkei Chinese website) conducted a survey on the adopted papers of the three top AI societies. The results showed that among the top 100 institutions in the number of authors in 2024, 31 were Chinese institutions and 37 were American institutions, second only to the United States.

In its “New Generation AI Development Plan” formulated in 2017, China proposed to become a major global innovation center by 2030 and promote research at the national level. As a result, the number of authors of adopted papers at Tsinghua University and Peking University increased by 3 to 4 times.

The number of authors at Zhejiang University, the alma mater of DeepSeek founder Liang Wenfeng, soared from 34 in 2020 to 906 in 2024. The ranking rose from 89th to 6th.

Many of the core researchers involved in DeepSeek’s latest AI model “R1” paper also come from top-ranked universities. For example, Tsinghua University (second), Peking University (sixth), Sun Yat-sen University (65th), Beijing University of Aeronautics and Astronautics (90th), etc., are all “national key universities” supported by the Chinese government in terms of budget priority allocation and other aspects.

In China, AI research officially began to develop after Microsoft of the United States established a research institute in Beijing in 1998. Kai-Fu Lee, who has worked for Microsoft and Google for a long time, actively held research seminars, cultivated AI talents, and promoted the birth of start-ups. Kai-Fu Lee himself founded the AI ​​start-up “01.AI” in 2023.

Large companies are also promoting the development of autonomous AI. Alibaba’s Alibaba Cloud released the latest version of LLM “Qwen” “2.5-Max” on January 29, claiming that its performance exceeds DeepSeek’s “V3”. Tencent, ByteDance, Baidu and Huawei are also accelerating the performance of AI.

The “DeepSeek shock” shows that China’s AI strategy at the national level is bearing fruit. If start-ups continue to increase and participate in performance competition in the future, the United States’ advantage in the field of AI may be challenged.