The battle to craft the next generation of large language models (LLMs) is heating up, and a new contender from China, Moonshot AI, has just made a significant leap forward.

Less than a year after its inception, Moonshot AI, known as YueZhiAnMian in its home country, has reportedly secured over $1 billion in Series B funding, according to multiple reports from Chinese media. This colossal round of financing reportedly catapults the startup’s valuation to an impressive $2.5 billion, setting a new record for Chinese developers in the LLM arena.

Moonshot AI is on a mission to pioneer LLMs capable of digesting extensive swaths of text and data, a feat that has eluded many in the AI field.

The startup celebrated its launch last March, coinciding with the 50th anniversary of Pink Floyd’s “The Dark Side of the Moon” — a nod to founder Yang Zhilin’s favorite album and the inspiration behind the company’s name. With a 100 billion-parameter LLM under its belt, Moonshot AI introduced its first chatbot, Kimi, to the Chinese market in October.

Kimi boasts the ability to process up to 200,000 Chinese characters in a single dialogue, reportedly outpacing OpenAI’s GPT-4 by eightfold.

Greed is Good?

The details of Moonshot AI’s funding round have sparked interest, with notable investors including Alibaba and HongShan (formerly known as Sequoia China), as reported by the South China Morning Post. Other participants in the round are said to include the Chinese “super app” Meituan and Xiaohongshu, likened to China’s Instagram. This round follows a previous $200 million investment that valued the startup at $300 million.

The strategic involvement of HongShan, amidst the backdrop of Sequoia Capital’s decision to separate its Asian operations due to rising geopolitical tensions, adds a layer of intrigue to the investment. Not to mention stupidity.

One serious question: Would you fund your adversary’s competitive development of AI related product and IP?

The Race is On

As the landscape of AI investment shifts, China’s tech titans are stepping in to back the nation’s burgeoning LLM field, mirroring the trend seen in the U.S. with tech giants like Microsoft, Google, and Amazon investing heavily in AI startups.

The only difference is that in China, the CCP owns all of these companies by default, whereas in the western world, they tend to remain private, owned by their investors and shareholders.

Moonshot AI’s rapid ascent and the pedigree of its founder, Yang Zhilin, underscore the intense interest and potential within the AI sector.

Yang, a Carnegie Mellon University alumnus with a rich background in AI research and development, including work at Google Brain and Meta AI, brings a wealth of experience to Moonshot. His involvement in the development of Transformer-XL, a breakthrough in LLM architecture, has undoubtedly influenced Moonshot AI’s focus on processing long-form context and response.

Good on him.

As Moonshot AI and other Chinese startups push the boundaries of what LLMs can achieve, the global AI community watches closely.

The race is on, not just to develop more advanced and capable models but also to navigate the complex web of investments, collaborations, and innovations that will shape the future of artificial intelligence.

Hope you got a good seat.