Saudi fund backs prominent Chinese generative AI start-up Zhipu

Saudi fund backs prominent Chinese generative AI start-up Zhipu

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A Saudi Arabian fund has backed China’s most prominent generative artificial intelligence start-up, becoming the only foreign investor in the country’s efforts to create a homegrown rival to OpenAI.

Prosperity7, part of the state-owned oil group Aramco’s venture capital arm, has participated in a roughly $400mn investment round in AI start-up Zhipu AI, said two people familiar with the matter. The deal values the Chinese group at about $3bn. 

Previously, China’s fledgling generative AI sector has been forced by US restrictions to rely on domestic funding, making Prosperity7’s investment the first high-profile example of a foreign backer throwing its weight behind one of the leading four generative AI start-ups.

Zhipu and its closest rivals — Moonshot AI, MiniMax and — have been dependent on support from government funds and large, local cloud providers. 

Prosperity7, which manages a $3bn fund, was a minority investor in Zhipu’s round, according to two people. Prosperity7 and Zhipu did not respond to a request for comment.

The investment demonstrates Saudi willingness to support an ecosystem that could guard against US dominance in AI. “The Saudis don’t want Silicon Valley dominating this industry,” said one person