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Baidu to Create $145M Venture Capital Fund for AI Startups

Chinese search giant Baidu Inc. is looking to create a CN¥1 billion ($145 million) venture capital fund aimed at supporting start-ups in the country exploring generative artificial intelligence (AI).

The Beijing-based company stated on Wednesday that it would use the pool to back projects created out of its large language model (LLM), ERNIE Bot, with deployments of as much as CN¥10 million per piece.

Venture investors, including IDG Capital, will be in charge of evaluating pitches and demo products and approving the seed funding.

China Races Towards AI Investment

Chinese tech companies have found themselves locked in tough competition for introducing their own LLMs, seeing the significant success of OpenAI’s ChatGPT following its introduction in November last year.

According to a report this week, since 2020, nearly 80 firms in China have launched their own AI-powered chatbots, with releases this year demonstrating slightly better performance than the platforms of the US.

Baidu introduced ERNIE in March this year, making it the first to deliver the country’s first ChatGPT rival. The launch prompted other Chinese companies, including e-commerce giant Alibaba Group Holding Ltd., Tencent Holding Ltd., and SenseTime Group Inc., to follow and introduce rival LLMs.

Baidu founder and chief executive Robin Li expect the company to become the first to rework all its products, saying it’s about reworking and restructuring AI instead of integrating and accessing it.

However, with the rise of AI chatbots in the country, China’s internet regulator quickly moved to control the technology, drafting regulations in April to implement solid rules for using generative AI.

The cyberspace agency has stated that it will need security assessments of generative AI tools before they can be carried out.

In addition, US sanctions have hindered Chinese tech firms from accessing quality chips to train their AI models, potentially expanding the gap between services such as Baidu’s ERNIE and its US counterparts.

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