This move mirrors the strategy of Tencent’s competitor Alibaba in supporting promising ventures in the competitive AI sector. Credit: Tada Images/Shutterstock.

Tencent has joined a $300m-plus (2.14bn yuan) financing round for Chinese generative artificial intelligence (AI) startup Moonshot, raising the company’s valuation to $3.3bn, reports Bloomberg.   

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

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

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

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

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

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

Moonshot is among the six rapidly growing Chinese AI 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 companies such as Baichuan and MiniMax.  

Recently, Baichuan completed a funding round, securing approximately 5bn 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, highlighting the breadth of interest in China’s AI development. 

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

This action was a response to US restrictions on semiconductor exports to China, aimed at limiting Beijing’s AI goals.