China’s Meituan to buy AI tech startup Light Year from co-founder to make a push into generative AI
Chinese food delivery giant Meituan announced on Thursday it’s acquiring artificial intelligence (AI) startup Light Year from its co-founder and former director Wang Huiwen, as it aims to develop its own generative AI.
The move comes at a time when AI has captured the attention of investors worldwide, leading to a surge in investments and acquisitions as businesses race to develop generative AI technologies similar to ChatGPT.
The total value of the deal for Light Year includes $233.7 million in cash, along with 366.9 million yuan ($50.66 million) of debt and a payment of $28 million to HongShan, the previous investor of the AI firm and an investment fund managed by Sequoia Capital China Growth Fund VII, Reuters reported, citing sources from the company.
This acquisition will allow Meituan, in which online advertising giant Tencent holds an 18.7% stake, to solidify its position in the AI landscape of China. Upon the completion of the deal, Meituan will have full ownership of Light Year, holding a 100% stake in the company.
Light Year, which had approximately $285 million in net cash as of June 29, specializes in the research and development of large language models. The company was founded and controlled by Wang Huiwen, who played a key role in the establishment of Meituan in 2010. Wang recently resigned as the non-executive director of the food delivery giant due to health reasons.
Meituan was founded in 2010 by Wang Xing. It was one of China’s most popular internet startups. Meituan-Dianping is a daily deal site for locally found consumer products and retail services. In addition to its food delivery service, Meituan also offers deals of the day by selling vouchers for local services and entertainment.