Alibaba Leads $600 Mn Investment Round for Chinese AI Startup MiniMax

Chinese MNC Alibaba has reportedly led a funding round of over US$ 600 million for AI startup MiniMax, marking its second major deal in the AI sector this year. 

MiniMax has attracted funding at a valuation exceeding $2.5 billion, with Alibaba and HongShan (formerly Sequoia China) investing.

After facing regulatory scrutiny and economic challenges, Alibaba has been part of two major AI deals in 2024. The company led a $1 billion funding round for Moonshot AI, another startup in the same space, resulting in a valuation of around $2.5 billion.

About MiniMax

Founded in 2021 by former SenseTime Group employees, including Yan Junjie, MiniMax specializes in social AI experiences, creating AI companions and virtual characters for user interaction, spanning video games, and cartoon personas. 

The startup's two apps, Talkie for international markets and Xing Ye for China, enable users to engage with a diverse array of characters, ranging from fantasy and science fiction to anime, including popular figures like Naruto or unconventional choices like a block of cheese, with many characters featuring AI-generated voices. Users can select characters, pose questions, and engage in conversations facilitated by the underlying AI model.

Previously, the startup secured $250 million in funding from an entity supported by Tencent, along with other investors.

China’s AI Play

China's emphasis on AI research, declared a priority by President Xi Jinping, has spurred companies like Alibaba to invest in cutting-edge technologies. This aligns with the nation's ambition to reduce reliance on the West and underscores the geopolitical importance of AI, with both military and commercial implications. 

Beyond AI investments, Alibaba is undergoing a strategic restructuring to facilitate independent business lines, spanning cloud services to logistics. The company aims to revive its cloud business, integrating AI, and its proprietary model, Tongyi Qianwen, across diverse sectors, including entertainment. It hosts half of China's generative AI firms and serves approximately 80% of the country's technology companies.