Chinese venture capitalist Allen Zhu steers clear of mainland tech firms’ AI large language model frenzy

Venture capitalist Allen Zhu Xiaohu, known for his early investment in ride-hailing giant Didi Chuxing, said he has no interest in funding Chinese start-ups building large language models (LLMs), the technology behind ChatGPT and other generative artificial intelligence (AI) services.

Investing “makes no sense since those LLM start-ups have neither [the relevant application] scenario nor data” for such a business model to prosper, said Zhu, a managing director at GSR Ventures, in his recent interview with online news portal Tencent News. “How do you make money out of just developing an LLM?”

At GSR, which invests in early-stage technology companies in the United States, China and other markets in East Asia, Zhu is recognised for his track record of identifying and funding potential new unicorns, which are start-ups valued at more than US$1 billion.

His view echoes that of Baidu co-founder, chairman and chief executive Robin Li Yanhong, who described the repeated launch of various LLMs on the mainland as “a huge waste of resources” at the annual X-Lake Forum in Shenzhen last November.