Alibaba Cloud has spearheaded a 2 billion yuan ($290 million) investment in ShengShu, the startup behind the AI video generation tool Vidu, marking a significant move toward developing 'world models' in artificial intelligence rather than relying solely on large language models (LLMs) trained on text data [1]. The Series B funding round also included participation from TAL Education and Baidu Ventures, and follows ShengShu's previous 600 million yuan fundraising from Qiming Venture Partners and other backers about two months prior [1]. The startup has not disclosed its current valuation [1].
ShengShu aims to use the new capital to develop a 'general world model' that leverages multimodal data—including vision, audio, and touch—to more accurately simulate real-world scenarios, bridging the gap between digital domains such as games and AI-generated video, and physical domains like autonomous driving and robotics [1]. Zhu Jun, founder of ShengShu, stated that the goal is to connect perception and action, enabling AI systems to consistently model and predict real-world behavior [1].
The company's latest Vidu Q3 Pro model, released in January, is ranked among the top 10 AI models for generating videos from text and images, according to Artificial Analysis [1]. ShengShu launched Vidu globally months before OpenAI made its Sora tool for AI video generation widely available, although Sora has since been shuttered [1]. Chinese short-video companies Kuaishou and ByteDance have also introduced competing AI video generation tools [1].
Alibaba has been expanding its investments in startups focused on world models, including a recent $50 million investment in Tripo AI, a platform that generates digital 3D models from photographs and is also moving away from language model techniques toward AI grounded in physical space [1].
CONCLUSION
Alibaba's substantial investment in ShengShu signals a strategic shift toward world models in AI, aiming to bridge digital and physical domains for more advanced real-world simulation. The move is expected to accelerate innovation in robotics, autonomous driving, and AI-generated media, positioning Alibaba and its partners at the forefront of next-generation AI development. Market sentiment is positive, with high impact anticipated as AI investment continues to drive technology sector growth.