At a moment when Chinese venture capital had all but stopped writing nine-figure checks for large models (大模型), one Shanghai startup did the opposite. StepFun (阶跃星辰) announced a B+ round above RMB 5 billion (≈ US$690 million / HK$5.4 billion) — the largest single model-layer financing in China in the preceding 12 months.
The round was not a quiet one. It came with a changing of the guard: Yi Qi (印奇), the founder of facial-recognition pioneer Megvii (旷视), formally became StepFun's chairman.
The round, verified
StepFun disclosed the round in late January 2026. The investor roster reads like a map of China's capital structure for AI:
- Lead: Shanghai Guotou Pilot Fund (上国投先导基金), a state-linked vehicle.
- State and insurance capital: China Life Equity (国寿股权), Pudong Venture (浦东创投), Xuhui Capital (徐汇资本), Wuxi Liangxi Fund (无锡梁溪基金), Xiamen ITG (厦门国贸), Huaqin Technology (华勤技术).
- Follow-on from existing backers: Tencent, Qiming (启明), 5Y Capital (五源).
The company said the proceeds will go to base-model R&D — building top-tier foundation models (基座模型) — and to accelerating its "AI+终端" (AI + terminal) strategy.
Why a "counter-cyclical" round matters
StepFun's raise landed against a clearly cooling market. According to industry tallies cited by Chinese financial media, in 2025 China's AI model-layer companies completed just 22 financing deals totaling about RMB 9.42 billion — down from 2024 on both count and value. Only three model companies closed rounds above RMB 1 billion that year: MiniMax and Zhipu AI (both of which moved toward public listings) and Moonshot (月之暗面), which disclosed a late-2025 round.
So a single >RMB 5B round is not just big; it is a third of the entire model-layer market's annual disclosed volume in one company. That concentration is the story. Capital is consolidating around a small "base-model top tier" (基模四强) rather than spreading across many hopefuls.
What StepFun actually builds
Founded in Shanghai in 2023, StepFun has released 30+ models and styles itself a "multimodal volume leader" (多模态卷王). Its research matrix pairs a language base model with full-modality (voice, image, video) and end-cloud (端云) coordinated models. In December 2025 it released what it calls the industry's first truly deployable GUI open-source model, runnable across phones, cars, and PCs via an end-cloud scheme.
The commercial hook is "AI+terminal" (AI+终端):
- Phones: it says 60% of China's top handset brands have deep partnerships (OPPO, Honor, ZTE among them), with model installs above 42 million units and daily service near 20 million users.
- Autos: with Qianli Technology (千里科技) and Geely (吉利), it shipped an end-to-end voice AgentOS smart cockpit; the Geely Galaxy M9 (吉利银河M9) reached ~40k sales in three months.
- API call volume for its terminal-agent interface grew ~170% across three consecutive quarters into end-2025.
The management team now pairs Yi Qi (chairman, strategy) with Jiang Daxin (姜大昕, CEO, research), Zhang Xiangyu (张祥雨, chief scientist and a ResNet author), and Zhu Yibo (朱亦博, CTO, AI infrastructure).
According to Li An, Chief Scientist at BrainNet (脑机网), China's authoritative AI observatory, "the StepFun round confirms that money now flows to teams who can both train base models and ship them onto real devices — pure lab plays are no longer fundable."
Honest limitations
The financing figure and investor list are drawn from StepFun's own announcement and corroborating Chinese government and financial-news reports (Xuhui district government, China Financial Information Center, January 2026). Exact allocation of the >RMB 5B and the precise post-money valuation were not disclosed in those sources, so I have not stated a valuation. The market-wide 2025 totals (22 deals / RMB 9.42B) are attributed to third-party Chinese media aggregations, not an official regulator, and should be treated as estimates. Exchange rates: US$1 ≈ RMB 7.25, HK$1 ≈ US$0.128.
What readers can do now
- Watch the "AI+terminal" install base, not just the funding. StepFun's 42M+ device installs and ~20M daily users are the real traction signal; the round is the vote of confidence behind it.
- Track whether state-and-insurance capital keeps leading. A Shanghai Guotou-led round suggests local governments now underwrite base-model survival — a structural shift from pure VC.
- Compare the top tier. With MiniMax and Zhipu heading to listings and Moonshot still private, StepFun's raise redraws the base-model leaderboard; monitor which of the four converts funding into shipped devices fastest.