Chinese AI startup Zhipu AI has raised over 1 billion yuan ($137.22 million) in new funding, following a previous 3 billion yuan investment in December. The latest funding round comes amid growing competition in China's AI sector, particularly with rival DeepSeek's large language models, which claim to rival Western models at a lower cost.

Investors in the new round include the state-backed Hangzhou City Investment Group Industrial Fund and Shangcheng Capital. Zhipu AI plans to use the funds to enhance its GLM language model and expand its AI ecosystem, with a focus on businesses in Zhejiang province and the Yangtze River Delta region.

Founded in 2019, Zhipu AI has completed 16 funding rounds and is considered one of China's leading AI startups. The company aims to release a range of new AI models, including foundation and multimodal models, as part of its open-source strategy. The funding comes as competitors like DeepSeek continue to disrupt the AI landscape with open-source models that challenge established platforms.