Alibaba ties up with Lee Kai-fu’s unicorn as China’s AI sector consolidates


Alibaba Group Holding’s cloud computing business is collaborating with Chinese start-up 01.AI to develop artificial intelligence (AI) models, a sign of consolidation in an increasingly crowded market on the mainland.
Alibaba Cloud announced on Thursday it had reached a deal with Beijing-based 01.AI, founded by former Google China head Lee Kai-fu, to set up an “industrial large model laboratory”.

The lab will combine the research and development capabilities of the two teams to explore technology and services related to AI models, with the aim to create “strong and comprehensive large model solutions” for business clients, according to a statement from Alibaba Cloud.

Alibaba owns the South China Morning Post.

Founded in May 2023, 01.AI achieved unicorn status just six months later, after a funding round that included Alibaba Cloud. The start-up’s open-source foundational large language model (LLM) Yi-34B was once ranked as the best pre-trained model by online AI community Hugging Face. It has since fallen behind.

Lee Kai-Fu, founder of Chinese unicorn 01.AI. Photo: Edmond So
Lee Kai-Fu, founder of Chinese unicorn 01.AI. Photo: Edmond So

01.AI’s best model – Yi-1.5-9B-Chat-16K – came in 10th among Chinese competitors, according to the latest ranking by benchmarking platform SuperClue. Alibaba Cloud’s Qwen2.5-72B-Instruct took the lead, trailing only models from foreign rivals OpenAI and Anthropic.



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