In the ever-evolving world of artificial intelligence, a new contender has emerged from China. Moonshot AI, a startup founded less than a year ago, has reportedly raised over $1 billion in a Series B round, according to multiple media reports out of China. This latest injection of capital would value Moonshot AI at $2.5 billion, making it the largest single funding round for Chinese Large Language Model (LLM) developers on public record.
Moonshot AI, known as YueZhiAnMian in China, has been focusing on the development of LLMs. Specifically, its unique selling point is its ability to process long-form context and response, an area that has long outfoxed others in the field. In March of last year, the startup launched with a 100 billion-parameter LLM. Then in October, Moonshot launched its first chatbot in China, Kimi, which claims to be able to support the processing of 200,000 Chinese characters in a single conversation.
The funding is reportedly coming from a list of big-name investors that include e-commerce giant Alibaba and HongShan, the VC firm formerly known as Sequoia China. Other investors in the round included Chinese “super app” Meituan and Xiaohongshu, sometimes referred to as China’s answer to Instagram.
Moonshot AI’s focus on longer input and output and producing more accurate results for queries involving this lays the groundwork for the company to target text-based use cases that haven’t been widely tapped by existing LLMs and generative AI applications, such as legal documents, fiction writing, and deeper financial analysis.
The market for fundraising remains constrained globally, but this round speaks to the willingness of those with deep pockets to jump in when the right opportunities come up. Yet even with the wider, global AI frenzy – where some $200 billion is set to be invested by 2025, forecasts Goldman Sachs – the funding landscape in China is surprisingly tepid.
In 2023, China recorded around 232 investments in the AI space, a 38% decline year-over-year, according to research firm CBInsight. The total amount raised by China’s AI firms amounted to roughly $2 billion, 70% less than the year before.
Despite these challenges, Moonshot AI’s recent funding success demonstrates the potential for innovation and growth in the AI sector. As the race for the next big LLM heats up, it will be interesting to see how Moonshot AI leverages its newfound capital to advance its technology and stake its claim in the competitive AI landscape.
