Kai-Fu Lee’s LLM Startup, Valued at $1 Billion, Introduces an Open Source Model

The venture capitalist and computer scientist aims to establish a counterpart to OpenAI for China.

Kai-Fu Lee's LLM Startup
Kai-Fu Lee’s LLM Startup

Kai-Fu Lee, the computer scientist renowned in the West for his bestseller “AI Superpowers” and in China for his investments in artificial intelligence unicorns, embarks on a new venture with significant aspirations.

Kai-Fu Lee’s LLM Startup

In late March, Lee founded 01.AI with the goal of creating a large domestic language model for the Chinese market. This endeavor positions him in direct competition with other prominent Chinese tech figures, such as Sogou’s founder Wang Xiaochuan, who have been rapidly assembling talent and venture capital to establish China’s counterparts to OpenAI.

“I believe necessity drives innovation, and there’s an evidently significant need in China,” said Lee, who, at 61, serves as the CEO of 01.He explained the reason for launching the company, stating, “Unlike the rest of the world, China lacks access to OpenAI and Google due to their products not being available in China. Many in the field of large language models are striving to contribute to a solution for a market that truly requires it.”

01.AI’s growth mirrors the rapid advancement in the generative AI field. Just seven months after its establishment, the startup has introduced its inaugural model, the open-source Yi-34B. Kai-Fu Lee explained that the decision to launch an open large language model as their first product is a way to “give back” to society. He noted, “For those who have found LLaMA to be a valuable resource, we’ve provided an appealing alternative.”

At present, Yi-34B, a bilingual (English and Chinese) base model trained with 34 billion parameters and notably smaller than other open models like Falcon-180B and Meta LlaMa2-70B, claims the top position among pre-trained LLM models, as per Hugging Face’s ranking.

We continue to hold the belief that larger models, when trained effectively with extensive high-quality data, will consistently outperform considerably smaller models of similar quality and technology,” explained Lee. He added, “The fact that [Yi-34B] outperforms much larger models is not a common occurrence. We are quite confident that as we release models ranging from 100 billion to 400 billion over the next year to year and a half, these models will exhibit significant improvements compared to the one we announced today.

The startup’s swift initiation of model training is undoubtedly a result of its successful fundraising efforts, which are essential for attracting top-tier talent and AI processors. Although he didn’t reveal the exact amount raised, Lee mentioned that 01.AI is valued at $1 billion following investments from Sinovation Ventures, Alibaba Cloud, and undisclosed investors.

AI’s Exceptional Team and Inspirational Culture

01.AI has expanded its team to over 100 employees, with over half of them being experts in large language models (LLM) from major multinational and Chinese tech companies. For instance, the vice president of technology was an early member of Google’s Bard, and the chief architect co-founded Tensor Flow and collaborated with prominent researchers like Jeff Dean and Samy Bengio at Google Brain. The individuals driving Yi-34B include Wenhao Huang, a former Microsoft Research Asia veteran, and Ethan Dai, who held senior AI roles at Huawei and Alibaba.

Having supported more than ten unicorns and founded seven companies through Sinovation Ventures, Lee is arguably one of the most well-connected investors and entrepreneurs in China.

“It’s been, you know, over 25 years since the establishment of Microsoft Research Asia, and everything I’ve been involved in has revolved around attracting exceptional talent,” said Lee, who initiated Microsoft Research Asia, the largest overseas research center of the U.S. giant, before leading Google China. Over time, Microsoft Research Asia has gained recognition as the “West Point” for nurturing China’s AI entrepreneurs.

Of course, you want to ensure fair compensation and maintain competitiveness in pay, but I truly believe it’s also about individuals having the belief that they can contribute to making a difference and having faith in the company’s success,” Lee remarked during a video call at 9:30 p.m. Beijing time. His team members demonstrated the same self-motivation. For instance, one of the startup’s infrastructure experts continued working late into the night, messaging Lee at 2:15 a.m. to share their enthusiasm for being part of 01.AI’s mission.

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