US blacklists Tencent-backed AI startup amid tech curbs

• Published On: 16 January 2025 at 20:08

The United States has added Tencent-backed startup Zhipu to its trade-restrictions blacklist, targeting one of the emerging companies regarded as a strong contender in the race to develop a competitor to OpenAI's ChatGPT.

On Wednesday, the US Department of Commerce added the startup to its entity list, preventing US suppliers from selling to it without a licence.

This last-minute action by the outgoing Biden administration comes alongside new regulations aimed at preventing advanced chips, including AI accelerators, from reaching China.

Zhipu, backed by Tencent and Alibaba Group Holding Ltd., is one of a few promising AI startups in China that have received significant funding and achieved high valuations.

Based on research at Tsinghua University, the company is developing large language models similar to those developed by OpenAI. In 2024, Zhipu was estimated to be worth almost $3 billion.

According to Zhipu, the US "lacked factual basis" for the decision. "Being added to the Entity List will have no significant impact on the company's business," Zhipu wrote on WeChat on Wednesday.

Previous export restrictions on advanced AI chips, such as those from Nvidia Corp., have hampered Zhipu's access to cutting-edge AI development hardware in China.

Despite this, the company, which received approximately $410 million in its most recent funding round in December, claims to have tens of millions of users in the country.

Zhipu is one of many Chinese companies that have been added to various US government blacklists.

Tencent was added to a Defence Department list of companies linked to the Chinese military just a week ago, along with Tesla Inc. battery maker Contemporary Amperex Technology Co. Ltd.