Baidu launches $145m China AI fund

Generative AI has attracted enormous investor interest ever since US-based OpenAI launched ChatGPT last November - a chatbot known for its ability to engage in human-like conversation. It sent shockwaves through the technology sector, prompting assorted efforts to leverage the platform. ChatGPT is not available in China, which is contemplating a standard of its own.

ChatGPT is based on a large language model (LLM) developed by Microsoft-supported OpenAI. In March, Baidu became the first Chinese company to launch its own LLM, known as Ernie. The AI fund is intended to encourage start-ups to build applications that use the Ernie bot as a foundation.

US start-ups began creating apps on top of GPT-3 – the infrastructure behind ChatGPT - as early as 2020. Of the various early movers in the AI copywriting space, Jasper was the first to raise capital at a meaningful scale, closing a USD 125m Series A round at a USD 1.5bn valuation last year. It is expected to become the first generative AI player to reach USD 100m in annual recurring revenue (ARR).

"I think China will have its own ecosystem with its own large language models and base models. There will be at least one, and possibly two or three in China that can support people developing all kinds of AI-native applications. For example, Baidu's Ernie is working to become one of the default models for AI developers," said Robin Li, founder and CEO of Baidu, in a statement.

He expressed optimism about the prospects for AI applications in China, noting a historical willingness to embrace emerging technologies. China didn't invent Android, iOS or Windows, Li noted, but it has developed many innovative applications like WeChat, Tiktok and Didi.

"In the age of artificial intelligence, it is the same situation," he added. "Technology brings a lot of possibilities, and we are very good at developing applications and making the most of those possibilities."

Baidu has also launched the Wenxin Cup, an entrepreneurship competition focused on AI. Participating teams must develop apps based on Ernie or combine the Ernie LLM with their own products. Investors from the likes of IDG Capital, Baidu Ventures, Baidu Capital will serve as judges. The winners will receive funding of up to CNY 10m (USD 1.4m).

AIGC opportunities tend to fall into three distinct layers: foundational LLMs like OpenAI’s GPT-4 framework - the successor to GPT-3 - at the bottom; sector-specific models for the likes of finance and healthcare in the middle; and a top layer comprising applications that leverage the capabilities of LLMs.

Established Chinese start-ups in the space include Luchen, LangBoat, and Emotibot.

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• Topics
• Greater China
• Technology
• Fundraising
• Venture
• China
• artificial intelligence
• Baidu
• IDG capital