TL;DR:
- Kunlun Tech plans to invest USD 560 million to acquire and increase the capital of its LLM development partner.
- The company’s shares closed little changed, but the initial market response was positive.
- The investment aims to accelerate the development of a ChatGPT-like large language model.
- Kunlun Tech’s stock has experienced an impressive 286 percent surge this year due to its focus on ChatGPT-like products.
- The acquisition and capital increase will dilute Kunlun Tech’s stake in its subsidiary to 75 percent and grant Singularity AI shareholders a 15.4 percent stake.
- The move will expedite the iteration and upgrade of Kunlun Tech’s LLM Tiangong 3.5 and enable the application of AI technology in various sectors.
- Kunlun Tech plans to collaborate with Singularity AI on AI-based music and gaming products.
- The joint creation, Tiangong 3.5, has shown promising capabilities in smart Q&A, chat interactions, and text generation.
Main AI News:
In a bold strategic move, Kunlun Tech, the Chinese mobile gaming platform operator, has announced its plan to invest a staggering USD 560 million. The investment will be utilized to acquire the firm currently collaborating with Kunlun Tech in the development of an impressive ChatGPT-like large language model. This announcement sparked considerable market interest, leading to an initial 8 percent surge in Kunlun Tech’s shares, ultimately closing with a modest 0.1 percent increase at CNY55.68 (USD7.78) in Shanghai.
The year has been nothing short of remarkable for Kunlun Tech, with its stock witnessing an astronomical surge of 286 percent. The Beijing-based firm’s unwavering dedication to the advancement of ChatGPT-like products has undoubtedly captured the attention and confidence of investors. Building on this momentum, Kunlun Tech’s holding unit, Star Group Interactive (SGI), will issue new shares to two shareholders of Singularity AI Technology. This strategic move aims to secure the acquisition of all equity from Singularity AI and bolster SGI’s capital by an additional USD400 million, firmly establishing Kunlun Tech’s commitment to artificial intelligence technology.
Upon the successful completion of these transactions, Kunlun Tech and its subsidiaries will witness a slight dilution in their combined stake in SGI from 80 percent to 75 percent. Concurrently, Singularity AI’s shareholders will acquire a 15.4 percent stake in the firm, demonstrating the expanding partnership between the two entities. Kunlun Tech envisions that this acquisition and capital increase will expedite the iteration and enhancement of its revolutionary LLM Tiangong 3.5. Moreover, it will empower the company to seamlessly integrate AI technology into various sectors, including search engines, games, music, anime, and social media.
Kunlun Tech’s ambitions do not end there. The company plans to actively engage in the research, development, and commercialization of AI-based music and gaming products. By collaborating closely with Singularity AI, Kunlun Tech aims to forge a formidable competitor to OpenAI’s ChatGPT. Their joint creation, Tiangong 3.5, was made available for user testing in April and has already garnered significant attention. Renowned for its exceptional ability to rapidly and accurately handle smart questions and answers, chat interactions, and text generation, Tiangong 3.5 is set to revolutionize the AI landscape.
It is worth noting that Singularity AI faced a net loss of CNY23.7 million (USD3.3 million) in the first quarter of this year, accompanied by revenue of CNY2.1 million (USD293,567). Despite these initial challenges, Kunlun Tech remains confident in the partnership’s potential. Singularity AI reported a net loss of CNY10.9 million in 2022, with revenue totaling CNY4.2 million.
Conclusion:
Kunlun Tech’s substantial investment in its LLM development partner highlights the company’s determination to excel in the AI industry. The strategic acquisition and capital increase demonstrate Kunlun Tech’s commitment to advancing its ChatGPT-like large language model, Tiangong 3.5, and applying AI technology across multiple sectors. This move positions Kunlun Tech as a formidable competitor in the market, as it seeks to revolutionize user experiences and drive innovation in the field of artificial intelligence. The market can expect heightened competition and accelerated AI advancements as Kunlun Tech and Singularity AI forge ahead with their ambitious plans.
