Tencent joins $300 million financing round for Moonshot

The investment in Moonshot is part of a wider trend of capital inflow into Chinese AI companies, with major technology firms and venture capitalists investing heavily to establish a presence in the AI market

Tencent has joined a more than $300 million (2.14 billion yuan) financing round for Chinese generative AI startup Moonshot, raising the firm’s valuation to $3.3 billion, according to Bloomberg.

This move mirrors the strategy of Tencent’s competitor Alibaba in supporting promising ventures in the competitive artificial intelligence sector.

As per sources, the funding round also saw participation from Gaorong Capital and existing investor Alibaba.

Moonshot and Gaorong representatives declined to provide comments, while Tencent and Alibaba did not reply to requests for comment, Bloomberg said.

The investment in Moonshot is part of a wider trend of capital inflow into Chinese artificial intelligence companies, with major technology firms and venture capitalists investing heavily to establish a presence in the AI market.

This push for AI dominance comes as these firms aim to fill a gap in the market like that of ChatGPT in the US.

Earlier this year, Alibaba led a $1 billion funding round for Moonshot, which was founded in Shanghai in March 2023.

Moonshot is among the six fast growing Chinese artificial intelligence startups, collectively known as the “Six Little Dragons,” vying to become China’s answer to OpenAI.

Both Alibaba and Tencent have stakes in most of the “Six Little Dragons,” which include firms such as Baichuan and MiniMax.

Recently, Baichuan completed a funding round, securing nearly 5 billion yuan, with contributions from both Alibaba and Tencent.

Other participants in Baichuan’s funding round included Xiaomi, China International Capital Corporation, the AI industrial investment fund, and Shenzhen Capital Group, underlining the breadth of interest in China’s AI development.

In 2023, China launched a $40 billion state investment fund for its semiconductor industry to strengthen domestic AI development.