China's GenAI Sector Experiences Funding Surge Amid Decrease in Deals
- tech360.tv
- Dec 19, 2024
- 2 min read
Chinese GenAI sector witnesses a surge in funding but a decrease in deals this year. Leading Chinese AI start-ups raise around US$2.1 billion collectively in 2021. Approval of new GenAI services by the Chinese government shows signs of market saturation.
Industry data reveals that investors are becoming more discerning due to market saturation in the Chinese GenAI industry.
According to data from Itjuzi.com, a start-up database service, there have been 113 deals in the Chinese GenAI sector as of December 18, which is approximately 20% fewer than the previous year's 143 deals. However, the total funding has surged to 35 billion yuan (US$4.8 billion) this year, compared to 20.5 billion yuan last year.
Leading Chinese AI start-ups such as Zhipu AI, Moonshot AI, Baichuan, and MiniMax, collectively known as the Chinese AI Tigers, have raised approximately US$2.1 billion this year. Zhipu AI recently secured an additional US$412 million in its fourth financing round to expand its market presence and stay competitive in the crowded industry.
The Chinese government has approved a total of 252 GenAI services, ranging from AI chatbots to bespoke industry solutions. However, the declining trend in deal-making indicates a slowdown in the entry of new GenAI services into the market.
In November, the Cyberspace Administration of China approved 64 new GenAI services, the smallest number among the three batches approved this year, signalling market saturation. The broader AI market, encompassing AI infrastructure and technology start-ups, has also experienced a cooling off in investment levels this year, as per Itjuzi data.
Overall, the Chinese AI market has seen a 23% decrease in deals this year, with 457 deals compared to last year's 595.
Chinese GenAI sector witnesses a surge in funding but a decrease in deals this year.
Leading Chinese AI start-ups raise around US$2.1 billion collectively in 2021.
Approval of new GenAI services by the Chinese government shows signs of market saturation.
Source: SCMP
