[Summary] Despite limited external publicity, AI large model company MiniMax has been providing large model bases for domestic mobile phone manufacturers, including OPPO, Xiaomi, Honor, and others.

Notably, many manufacturers have chosen MiniMax among numerous AI large model providers, indicating that the latter has likely established a certain technological or cost advantage.

According to insiders, MiniMax's revenue in 2023 was approximately tens of millions of yuan. From MiniMax's perspective, expanding revenue streams is a crucial strategy for pursuing a larger market.

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Insiders reveal that domestic mobile phone manufacturers (such as OPPO, Xiaomi, Honor, etc.), excluding vivo and Huawei, are currently purchasing AI large model bases from MiniMax. They then debug and train these models themselves, converting them into partially self-developed AI products for launch on mobile devices.

Mobile phone manufacturers possess technical talent and maintain strict control over production costs, rarely ceding profits to third parties. Instead, they retain control over high-value segments of the supply chain. The fact that these manufacturers choose to purchase rather than self-develop further underscores the technical barriers and challenges in developing AI large model bases, or the low pricing offered by MiniMax.

For manufacturers like Huawei, with sufficient resources to build an ecosystem and achieve economies of scale, this scenario is less pressing. However, for manufacturers like OPPO, whose product portfolio is primarily mobile phones, there may be a significant demand for outsourcing due to the lack of other products that can leverage large models.

MiniMax has grown precisely within this market niche.

Yet, in terms of revenue, insiders indicate that MiniMax's 2023 revenue was tens of millions of yuan, a modest figure considering its extensive clientele of major manufacturers.

The mobile phone market is even more concentrated than the large model market, with only a handful of high-quality, demand-driven customers. It is anticipated that MiniMax's bargaining power in this context is limited.

Potential for change lies in future business strategies.

Theoretically, to expand revenue, MiniMax and mobile phone manufacturers may pursue two cooperation models:

Firstly, charging ongoing service fees to mobile phone manufacturers, which would require the participation of more AI mobile phone manufacturers and further cost scaling.

Secondly, rather than directly charging B-end customers, MiniMax could explore monetization opportunities among C-end users. Drawing on the App Store's profit model, these mobile phones could serve as channels for selling APIs. Users would pay MiniMax separately after utilizing the large models, potentially enabling MiniMax to forgo charging mobile phone manufacturers initially to increase base adoption.

The latter approach may represent MiniMax's next move.

Currently, numerous large model companies in China, including the "AI Six Dragons," are exploring commercial models. MiniMax's monetization efforts provide a novel perspective.

Domestic players generally emulate OpenAI, which has five monetization models:

1. OpenAI Plus, a subscription service for individual users.

2. ChatGPT Enterprise, a subscription service for large B-end customers.

3. ChatGPT Team, catering to SMEs and team users.

4. API interface services.

5. Collaboration and revenue sharing with ecosystem partners like Microsoft Azure.

However, even as OpenAI expands its operations, it faces soaring operational costs and sustained losses. Media reports suggest that OpenAI's revenue for this year is projected at USD 3.7 billion, with losses of approximately USD 5 billion. The situation is even more challenging for domestic players, whose commercialization progress lags far behind.

From this perspective, MiniMax's tens of millions of yuan in revenue in 2023 may compare favorably to its competitors.

Notably, since receiving USD 20 million in angel round funding from Sequoia Capital China, Highland Capital Partners, IDG Capital, and Yunqi Partners in January 2022, MiniMax has undergone three rounds of financing (Pre-A, A, and B) within two years.

The latest B round, led by Alibaba Group and Sequoia Capital China, closed in March 2024, raising at least USD 600 million and valuing MiniMax at over USD 2.5 billion. Sources indicate that MiniMax's IPO process may be accelerating.