Tencent, Alibaba Place Bets on Startups Racing to Become China’s OpenAI

In China, dozens of startups have been competing to develop conversational artificial intelligence for the Chinese market. Now some are starting to pull ahead, in part due to backing from tech giants with large cloud operations like Tencent and Alibaba.

Among them is Moonshot AI, developer of a chatbot that can process millions of Chinese characters in a single prompt. The one-year-old startup’s executives have been in talks with investors about raising money at a $3 billion valuation, before the investment, from investors including WeChat operator Tencent, according to a person involved in the discussions. Just a few months ago, the Beijing-based startup raised $1 billion from Alibaba and others at a pre-money valuation of about $1.5 billion, already giving it one of the biggest war chests among Chinese AI developers, according to the person.