StepFun Raises $717 Million, Outpacing Newly Listed AI Rivals
By Liu Peilin
Chinese artificial intelligence (AI) startup StepFun has raised more than 5 billion yuan ($717 million) in a new funding round, eclipsing the IPO proceeds of recently listed rivals as it pushes into hardware integration.
The Series B+ financing round, announced Monday, exceeds the proceeds raised by competitors Zhipu AI and MiniMax in their Hong Kong listings earlier this month, which brought in HK$4.173 billion ($535 million) and HK$4.596 billion, respectively.
StepFun’s latest round attracted a mix of state-backed and industrial investors, including vehicles linked to Shanghai State-owned Capital Investment Co Ltd., China Life Insurance Co. Ltd. (601628.SH +2.62%) and Shanghai’s Xuhui district. Existing shareholders such as Tencent Holdings Ltd. also increased their stakes.
The substantial fundraising underscores the intensifying battle among China’s leading large language model (LLM) developers to secure capital and define viable business strategies as the industry pivots toward commercial application in consumer devices and automobiles.
Alongside the funding news, StepFun named Yin Qi, the chairman of Chongqing Afari Technology Co. Ltd. (601777.SH +4.35%) and co-founder of Megvii Technology Ltd., as its new chairman. Caixin has learned that Yin will oversee StepFun’s overall strategy, specifically focusing on commercializing AI models in end-user terminals. Company founder Jiang Daxin will remain CEO, overseeing daily operations and product research and development. Other members of the core management team include Chief Scientist Zhang Xiangyu and Chief Technology Officer Zhu Yibo.
China’s top AI startups have aggressively secured fresh capital recently. Zhipu AI, officially Knowledge Atlas Technology Joint Stock Co. Ltd., became the sector’s first publicly traded company on Jan. 8, with its stock rising 65% since listing to reach a market capitalization of HK$84.5 billion. MiniMax followed closely, listing on Jan. 9 and seeing its shares surge 127% to a valuation of HK$117.9 billion. Meanwhile, Moonshot AI completed a $500 million Series C round in December 2025, ending the year with more than 10 billion yuan in cash. Founder Yang Zhilin said the company can raise sufficient funds in the private market and is in no rush to go public.
Despite high valuations, the sector faces steep losses driven by the immense costs of training and developing LLMs. Between 2022 and 2024, Zhipu AI and MiniMax reported total net losses of 3.89 billion yuan and $808 million, respectively. Losses continued to widen in 2025, with Zhipu recording a 2.358 billion yuan deficit in the first half alone, while MiniMax lost $512 million in the first three quarters.
Market observers view these four startups — StepFun, Zhipu AI, MiniMax and Moonshot AI — as China’s potential answer to OpenAI, valuing their scarcity as premier AI assets. While MiniMax focuses on consumer applications and Zhipu targets enterprise clients, StepFun has positioned itself around multimodal models and hardware integration. By the end of 2025, the company had released 29 models, including the multimodal Step 3 and various audio and graphical user interface tools.
StepFun currently holds the most partnerships with mobile phone manufacturers among its peers, providing technology for Honor, Oppo and ZTE devices. Vice President Li Jing previously told Caixin that the company’s models cover millions of terminal units, with cloud-based usage growing more than twenty-fold compared to early 2025 levels.
The company identifies the potential for personal AI hardware assistants as multimodal capabilities improve, with smart cars serving as a critical scenario due to their reliance on voice interaction. Li revealed that an internal meeting in September 2025 solidified the company’s direction to lead with terminal hardware applications.
Contact editor Wang Xintong (xintongwang@caixin.com)
caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Global Neighbours is authorized to reprint this article.
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