Following the news that Dark Side of the Moon recently secured a fresh round of financing amounting to $2 billion, another contender from the "AI Six Little Tigers," StepFun, is rumored to be finalizing a substantial $2.5 billion financing round. According to reports, StepFun is poised to complete this significant funding milestone soon. Coupled with previously reported financing for DeepThink, the domestic large model sector is now ushering in a new era of intense financing competition.

The latest $2.5 billion financing round for StepFun has reportedly attracted substantial industrial capital, including participation from mobile phone and consumer electronics supply chain giants such as Huaqin Technology, Longcheer Technology, OmniVision Group, and ZTE. Huaqin Technology and Longcheer Technology, both global leaders in original design manufacturing (ODM) for mobile phones, offer comprehensive R&D, design, and manufacturing services. OmniVision Group, a key supplier of image sensors, is positioned upstream in the supply chain for mobile phone cameras. ZTE has previously collaborated extensively with StepFun to co-develop AI phone functions, which have been mass-produced in several flagship models, including the Nubia Z80 Ultra. Additionally, the "Hong Kong version of Temasek," Hong Kong Investment Corporation Limited (HKIC), is also listed among the shareholders.

In contrast, the financing round for Dark Side of the Moon was spearheaded by Meituan Dragonball, with participation from China Mobile, CPE Source Peak, and others, illustrating a diverse investment landscape. With the successful stock exchange listings of Zhipu and Minimax, followed by the financing news of Dark Side of the Moon, StepFun, and DeepThink, the financing race in the domestic large model sector is intensifying.

As more players in the large model sector announce positive financing developments, it is clear that the capital market is keenly interested in this sector. Moreover, it underscores that the large model sector is advancing into a new phase of development.

I

Previously, discussions about large models often invoked phrases like "a hundred flowers bloom" and "a hundred schools of thought contend." This was largely due to the vast and diverse array of players in the large model sector. Whether they were startups or major internet companies, the sector could aptly be described as a "battle of a thousand models."

As large models have matured, particularly following the AI red envelope battle during the Spring Festival this year, public perception of large models has evolved significantly. Large models have transitioned from laboratories into the hands of everyday users. Today, when people encounter questions, problems, or work-related challenges, they almost invariably turn to large models for solutions.

Behind these developments, we observe that large models have become an integral part of people's daily work and lives. For the capital market, once large models have completed their initial user acquisition phase, the focus shifts to rapid commercialization and securing additional funding. It is at this juncture that we see players like Zhipu and Minimax entering the capital market, while players like Dark Side of the Moon and StepFun are being courted by a new wave of capital investors.

As financing news for Dark Side of the Moon and StepFun surfaces, it is evident that the capital market is accelerating its investments in the large model sector, aiming to capture the final wave of investment dividends. Furthermore, this trend indicates that the competitive landscape in the large model sector is gradually taking shape. For startup large model players, securing financing in this new wave is crucial for validating the success of their ventures.

II

As the competitive landscape in the large model sector solidifies, another trend is emerging and gaining momentum. Summarizing and defining this trend, we see that the large model sector is shifting its focus from competing over parameters to competing over commercialization and implementation.

Take, for instance, Dark Side of the Moon's latest $2 billion financing round. One key factor contributing to its high valuation is its robust commercialization and monetization capabilities. According to Wang Xinyu, a partner at Meituan Dragonball, following the K2.5 model update, Kimi's annual recurring revenue (ARR) exceeded $100 million in early March this year and continued to grow to over $200 million in April, with accelerated growth in paid subscriptions and API calls.

Through StepFun's financing, we can also discern a similar development trend. This is evident from the list of investors in StepFun's new financing round, which includes core companies from the consumer electronics supply chain such as Huaqin Technology, Longcheer Technology, OmniVision Group, and ZTE. Their decision to invest in StepFun ultimately stems from their recognition of StepFun's commercialization capabilities in its "AI+terminal" strategy.

According to Yin Qi, the chairman of StepFun, the global landscape for foundational large models is largely established, making it difficult for new leading companies to emerge. The core path for existing players is to identify exclusive scenarios and achieve commercial closure. In his view, StepFun's strategy for foundational large models is to "land in real-world application scenarios," ensuring that "R&D has clear iterative targets."

Terminal commercialization capabilities are viewed by Yin Qi as crucial for StepFun's competition in the future AI large model sector and a long-term focus for the company. Currently, its Step series multimodal models have formed partnerships with OPPO, Honor, Geely, and other manufacturers, with phone pre-installations exceeding 42 million units, covering approximately 60% of China's leading mobile phone brands and serving nearly 20 million users daily. In the automotive sector, its AgentOS smart cockpit has been deployed in mass-produced models, with nearly 40,000 units sold in the first three months after launch, and it is also expanding into overseas markets.

StepFun's strong commercialization capabilities in "AI+terminal" are a key reason for attracting such significant industrial capital investment. Ultimately, these industrial capital players are investing in StepFun to secure a foothold in the future AIOS system landscape.

For players already in the implementation and commercialization stages of large models, strengthening their commercialization capabilities is essential for achieving greater development in the new wave of capital enthusiasm.

III

As the competitive landscape in the large model sector solidifies and commercialization accelerates, maintaining competitiveness requires securing the final wave of capital windows through financing and listings. This is because, as investment enthusiasm in the large model sector wanes and internet giants enter the fray, startup large model players will face increasing survival pressures.

We know that after a brief Spring Festival AI red envelope battle, internet giants can swiftly acquire massive numbers of C-end users through their substantial capital reserves. For startup large model players, competing with internet giants' massive marketing budgets to acquire C-end users in the future will be extremely challenging.

Against the backdrop of intensifying C-end competition, players in the large model sector must focus on specialized sectors and scenarios to achieve growth. This is equally true for the B-end market. However, even in this market, they face significant pressure. For example, Kuaishou's Kling AI has already established a relatively clear competitive advantage in specialized image and video generation.

Take Dark Side of the Moon, which recently announced financing, as an example. Its strength lies in its capabilities in long-text scenarios, while StepFun's strength lies in its long-term accumulation in "AI+terminal."

Whether it's the entry of internet giants or the intense competition among startup players in the large model sector, it is clear that under this new wave of financing enthusiasm, competition in the large model sector is entering a white-hot phase. For many players in the large model sector, rather than pursuing large market scales and volumes, deeply embedding themselves in commercial and industry scenarios to achieve new growth is crucial for ensuring continued development.

Epilogue

As news of new financing rounds for Dark Side of the Moon and StepFun emerges, it is evident that competition in the entire large model sector is entering a new phase of development. Faced with a new landscape where some players have successfully listed while others continue to secure financing, finding innovative ways to survive in this new phase and breaking away from established development trends to chart new directions for the large model sector are critical issues that every player must consider.