Alibaba Leads $2.5 Billion Investment in AI Startup MiniMax

Alibaba Group Holding Ltd. is doubling down on its commitment to artificial intelligence (AI) with a significant investment in Chinese AI startup MiniMax, valued at over $2.5 billion. The ecommerce giant is leading a financing round of at least $600 million for MiniMax, marking its second major AI deal this year, Bloomberg reported.

MiniMax, founded just two years ago, has attracted funding from various investors, including Alibaba, at a valuation exceeding $2.5 billion. The startup specializes in social AI, developing AI companions and virtual characters for interactive experiences, with popular apps like Talkie for international markets and Xing Ye for China.

Alibaba’s move to back MiniMax comes amid a resurgence of interest in AI, fueled by the global buzz surrounding OpenAI’s ChatGPT release in November 2022. The ecommerce giant recently led a $1 billion funding round for Moonshot AI, another Chinese AI startup, further solidifying its position in the AI landscape.

The Chinese tech giant’s foray into AI investments reflects its strategic vision under new leadership. Alibaba’s CEO, Eddie Wu Yongming, has emphasized a focus on two main themes: “users first” and “AI-driven.” The company aims to provide infrastructure services for AI innovation and transformation across various industries.

Alibaba’s cloud computing unit plays a pivotal role in this strategy, hosting approximately 80% of China’s technology companies and serving 50% of the country’s generative AI firms. The integration of AI, including the in-house model Tongyi Qianwen, across Alibaba’s diverse operations underscores its commitment to leveraging AI technologies for growth and innovation.

The MiniMax deal underscores Alibaba’s eagerness to join other major tech players in betting big on AI. Tencent Holdings and Baidu Inc. have also made substantial investments in AI startups and released rival AI services, signaling a broader trend of tech companies embracing AI as a key driver of future growth.