"Zhipu AI", "originated from the Knowledge Engineering Laboratory at Tsinghua University, is a domestic large-model unicorn and one of the 'Big Six' large model startups (Moonlit, ZeroOne, Zhipu, Baichuan, MiniMax, Stepwise Stars).

Zhipu AI has jointly established a venture capital fund with multiple capital firms - the 'Z Fund (Zhipu Ecosystem Fund)', which recently completed its initial close with an AUM of 1.5 billion yuan, primarily investing in early-stage startups in the large model sector.

Initial close of the 'Z Fund'

In January this year, Zhipu AI led and jointly established the 'Z Fund (Zhipu Ecosystem Fund)' with Shijingshan Modern Innovation Industry Development Fund, Aofei Data, Yanbei Capital, Fuzhou Investment, among others.

Now, Zhipu AI has obtained an additional 500 million yuan in investment from the government and industrial investors, increasing the total size of the 'Z Fund' to 1.5 billion yuan, achieving its initial close.

The initial close, also known as the 'first closing', is an important milestone in the fundraising and operational cycle, marking that the fund has reached a certain fundraising scale and has the basic conditions to begin investing.

The investment direction of the Z Fund primarily covers the upstream and downstream of large models, with a preference for early-stage startups.

The Z Fund has received financial and project support from shareholders and LPs (Limited Partners) both before and after its initial close. For example, Shijingshan Modern Innovation Industry Development Fund, an ecosystem partner of the Z Fund, stated that Shijingshan and Zhipu jointly initiated this fund to jointly promote the large-scale implementation of large model technology and the development of the industrial ecosystem. It is reported that Beijing Shijingshan District has started construction on a total of 20,000 P intelligent computing centers, with 3,000 P expected to be lit up before the Spring Festival. In the future, this will be the basis for vigorously promoting AI ecosystem construction.

Achieving the initial close marks an important step for Zhipu AI in mimicking the business model of OpenAI in the United States. By becoming an LP (Limited Partner) of the fund, Zhipu AI further expands its influence in the large model field.

Zhipu AI's investment layout

A fund can conduct investment activities according to relevant regulations and restrictions before its initial close.

Zhipu AI has accumulatively connected with over 1,200 large model startups, of which it has invested in over 20 and incubated over 30 enterprises.

As of October, through the 'Z Plan', investments have been made in dozens of companies, including Jiliu Technology, Wuwenxinqiong, Muyanzhiyu, Caizhi Technology, and Dongyi Technology, covering the entire industry chain from underlying infrastructure, industry solutions, to upper-level innovative applications.

The Zhipu AI 'Z Plan' targets unlisted startups founded within five years in principle, as well as outstanding independent developers or teams, in the field of large AI models or any industry or scenario utilizing large AI models for technological transformation and upgrading, providing investment and technical support. Applicants are not required to adopt Zhipu AI's large model.

Zhipu's investment projects focus on startups with financing needs, reasonable valuations, and strong ecological synergy with Zhipu AI, which Zhipu AI will choose to invest in.

In addition, Zhipu has also launched an open-source large model fund for the open-source community. This plan includes three 'thousands': 1,000 cards, where Zhipu AI will provide 1,000 cards to the open-source community for large models to support open-source development; 10 million yuan, where Zhipu AI will provide 10 million yuan in cash to support open-source projects related to large models; and 100 billion tokens, where Zhipu AI will provide 100 billion free API tokens to outstanding open-source developers.

Zhipu CEO Zhang Peng stated that the ultimate goal towards AGI is 'ecological competitiveness'. We believe that in this wave, it is unlikely for one company or a few companies to handle this matter from start to finish. We definitely need the power of an ecosystem. Everyone may need to make some adjustments to parameters, determine how to weigh things, and focus on certain areas, which is everyone's freedom. It is precisely this diversity that ensures the stability and prosperity of the AGI ecosystem.

Compared to independent R&D, the AI ecosystem constructed through the investment layout of the entire industry chain enables Zhipu AI to effectively diversify risks, keenly capture industry innovation directions, integrate resources, improve the ability to adapt to market changes, and accelerate the application and commercialization of AI technology.

Through the above advantages, Zhipu AI can obtain broader cooperation opportunities and more sustainable competitive advantages, supporting its long-term growth. In the absence of sufficient industrial chain support, investing in the entire industrial chain is a viable way to break the deadlock.

Similarity with OpenAI's investment strategy

Zhipu AI has followed OpenAI's model in its journey to becoming an LP.

In March 2019, OpenAI underwent a significant organizational transformation, shifting from a non-profit organization to a for-profit entity with 'capped profits' and launched OpenAI LP.

Through the division of GP (General Partner) and LP identities, equity separation is achieved, with the GP holding control and the LP receiving returns, without interference. The board of directors of OpenAI LP has virtually no members holding shares in OpenAI LP. This arrangement aims to maintain the stability of the company's management and control.

Here are some companies invested in by OpenAI for a brief illustration:

Descript: A developer of audio and video editing applications, OpenAI led its Series C funding round of $50 million. Harvey AI: An AI legal advisor, OpenAI led its seed funding round of $5 million. Speak: An AI English learning platform, OpenAI participated in its Series B funding round of $27 million. Mem Labs: A developer of AI note-taking applications, OpenAI participated in its Series A funding round of $23.5 million. Milo: A babysitter robot assistant, selected for OpenAI's Converge accelerator program. Diagram: A website design tool, selected for OpenAI's Converge accelerator program. Cursor: A code editing tool, selected for OpenAI's Converge accelerator program.

The invested companies cover various fields such as audio and video editing, legal services, education, and productivity tools, demonstrating OpenAI's extensive investment layout in the AI field. Through these investments, OpenAI has not only expanded its technological application scope but also built a robust AI ecosystem.

In its development towards becoming an LP, Zhipu AI has drawn on OpenAI's experience. Both have adopted similar organizational structures and investment strategies to balance commercial interests and social missions, while attracting investments and top talent to promote the development and application of AI technology.