01.AI, a nascent artificial intelligence (AI) startup founded by venture capitalist Kai-Fu Lee, has reached a unicorn valuation of over $1 billion in less than eight months after its creation.
The Beijing-based startup joined the unicorn club after a funding round that included Alibaba Group’s cloud division, Lee’s venture capital (VC) firm Sinovation Ventures, and other undisclosed investors, Lee told media outlets including Bloomberg.
The chief executive officer of Sinovation Ventures, who began recruiting the team for 01.AI in March, will also serve as the CEO of the new venture.
01.AI started operations in June and officially introduced its first series of open-source AI models named “Yi” on November 5.
It showcased two products, including Yi-34B, a foundational large language model trained with 34 billion parameters and its counterpart Yi-6B, which is trained with 6 billion parameters. Both models are now available to developers around the world in Chinese and English.
Large language models (LLMs) are AI algorithms based on deep learning techniques and trained on large quantities of data to read, understand, summarise, and generate human-like text, images, and codes.
On key metrics, its Yi-34B outstrips leading open-source models including Meta Platforms’ Llama 2 and Baichuan2, which was developed by Alibaba and Tencent-backed Chinese AI (AI) unicorn Baichuan Intelligent Technology, according to Hugging Face, which runs leaderboards for the best-performing LLMs.
“We want to provide a superior alternative not just for China but for the global market,” said Lee in his interview with Bloomberg.
The popularity of OpenAI’s ChatGPT chatbot has ignited a dealmaking frenzy around AI and its applications in China.
Although China’s slow economic recovery weighs on market sentiment, AI is the only sector where venture dealmaking activity has continued to increase in the first nine months of 2023, according to a quarterly market report by investment bank China Renaissance. The valuation level of AI startups in China also grew substantially in the first three quarters in contrast to declines across most other industries.
01.AI’s domestic rival Baichuan reached the unicorn valuation in October – just six months after its inception. Led by Wang Xiaochuan, former CEO of Tencent-owned internet search engine Sogou, the startup saw its valuation cross $1 billion after raising $300 million in a Series A1 round from Alibaba Group, Tencent Holdings, and Xiaomi Corp.