A Beijing-based generative AI startup, AIsphere, has recently secured a substantial $14 million in funding, signaling its intent to compete with OpenAI's latest text-to-video AI tool Sora (via South China Morning Post). 

Led by venture firm Fortune Capital, this investment underscores the burgeoning interest in artificial intelligence (AI) and large language models (LLM) in China and the global AI race heating up.

China's AIsphere to Rival OpenAI's Sora

Founded in April 2023 by former ByteDance executive Wang Changhu, AIsphere has quickly gained traction. Its flagship product, the PixVerse video generator, was launched earlier this year, targeting both domestic and overseas markets. SCMP tells us that the company plans to catch up with OpenAI's Sora in the span of six months.

The funding round, which marks the company's third successful fundraising effort in China within a month, reflects growing investor confidence in AIsphere's potential. While the exact valuation of the company remains undisclosed, the substantial backing from Fortune Capital speaks volumes about its prospects.

AIsphere has positioned itself as having the "ByteDance gene," leveraging expertise honed at China tech conglomerate ByteDance to tackle complex challenges in computer vision. The company's recruitment of talent from industry giants like Tencent Holdings and Microsoft Research further strengthens its technical capabilities.

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AIsphere's Ambitious Targets

Wang Changhu, the visionary behind AIsphere, has set ambitious targets, declaring that the company aims to surpass Sora's capabilities within the next three to six months. This bold assertion underscores AIsphere's commitment to innovation and its determination to challenge established players in the AI space.

Despite AIsphere's optimism, some industry experts urge caution. Zhou Hongyi, chairman and CEO of 360 Security Technology, warns of a potential widening gap between China and the US in AI development, particularly if OpenAI possesses undisclosed "secret weapons."

Venture capitalist Allen Zhu Xiaohu echoes similar sentiments, expressing skepticism about funding Chinese startups focused on LLMs. He argues that without clear application scenarios or data, such investments may lack sustainability.

Nevertheless, AIsphere remains undeterred in its pursuit of commercialization. The company plans to offer video generation services to content creators, with future aspirations of providing AI-generated content directly to users.

Meanwhile, China's answer to OpenAI's ChatGPT, Baidu's Ernie AI chatbot, has recently faced setbacks following its association with Chinese military research. Reports linking Ernie to key military projects led to a significant drop in Baidu's stock value, highlighting the sensitive nature of AI development in China.

Furthermore, analysts predict delayed AI development in China as a result of worsening US tech trade sanctions.

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