Beijing-based AI startup 01.AI is reportedly in the process of raising up to $200 million in a new funding round, according to two sources familiar with the matter. This move follows the company's recent valuation milestone of $1 billion, achieved last month amid growing global interest in open-source AI models. 01.AI, founded by Lee Kai-fu, Google China's former chief, is among several Chinese startups aiming to leverage their large language models (LLM) for public use, entering a competitive landscape alongside industry giants Meta and Alibaba in the race to attract users and challenge market leader OpenAI.

Officially launched by Lee Kai-fu in July, 01.AI hit the $1 billion valuation mark in November, marking a rapid ascent within a short timeframe. The startup is actively seeking additional investments, particularly from U.S. dollar-based investors, as it positions itself to capitalize on the heightened enthusiasm for open-source AI models. Notably, in November, 01.AI gained recognition in the open-source LLM community when its Yi-34B model became the first Chinese LLM to lead Huggingface's performance and popularity leaderboard.

The surge of interest in generative artificial intelligence (AI) has proven beneficial for startups like 01.AI, enabling them to secure substantial funding commitments. This trend is exemplified by other Chinese AI firms, including Zhipu AI, founded in 2019, and Baichuan Technology, an eight-month-old startup that attained a valuation of $1.2 billion after its October fundraising round. However, the movement toward open-sourcing LLMs has faced criticism from OpenAI, the creator of the widely acclaimed ChatGPT, which emphasizes the importance of safeguarding AI model codes to prevent potential misuse by malicious actors. In contrast, tech giant Alibaba's cloud arm has actively embraced open-source initiatives, with its latest LLM, Qwen-72B, ranking high on Huggingface's leaderboard and contributing to the growing momentum of open-source AI ecosystems in China.