Alibaba Group Holding Ltd.’s cloud division led a 2 billion yuan ($293 million) funding round for ShengShu Technology, bolstering the war chest of a young contender in China’s crowded AI video contest.
The Beijing-based startup also drew backing from Baidu Ventures and Luminous Ventures, it said in a statement without disclosing its valuation. The capital injection comes just two months after the maker of the Vidu video generator raised 600 million yuan.
Vidu is in a capital-intensive race to develop video generation tools that’s pulled in tech heavyweights like ByteDance Ltd., Alibaba and Kuaishou Technology, as well as upstarts like PixVerse, which is also backed by Alibaba. They aim to fill the gap left after OpenAI shuttered its Sora project to focus on core GPT models.
Earlier in the week, the release of a new video generator dubbed Happy Horse — whose developer has not yet been revealed — triggered an investment flurry in Chinese AI stocks after speculation that its author was a local company. The new AI tool outperformed ByteDance’s Seedance 2 as the best text-to-video service on the Artificial Analysis chart.
Vidu’s Q3 model was among the top of that list upon its January release, while currently ranking ninth. It supports up to 16 seconds of synchronized audio and video generation, and multishot composition and camera control.
Alibaba, for its part, is one of the most active backers of Chinese artificial intelligence startups, hoping the financing will drive usage of its cloud computing platform, which has overtaken e-commerce as its fastest-growing moneymaker.
Founded in March 2023, ShengShu was started by Tsinghua University professor Zhu Jun, who serves as its chief scientist. Its early backers include Qiming Venture Partners, Baidu Inc. and a Beijing government fund. In 2025, the company reported more than tenfold growth in both users and revenue, without disclosing specific figures.
Vidu has reached users in over 200 countries and regions, spanning industries such as animation, advertising and film. In December, ShengShu open-sourced Motus — a new AI model line that enables robots and other machine-intelligence systems to better perceive and understand real‑world environments. The company said it has signed deals with AI hardware and model makers to deploy the model.
The company intends to use the new funds to advance its development of a general world model, according to the statement.
