On Thursday (29 June), Meituan announced that it had entered an agreement to acquire Light Year, an AI company founded by retired Meituan co-founder Wang Huiwen, for about US$285million.

Founded only in 2023, Light Year has been working on its own Large Language Model (LLM), and was a contender to be China’s top generative AI company. Wang Huiwen personally invested US$50million to start Light Year. Leading investors in China including Sequoia China (renamed HongShan in the Sequoia split), Zhen Fund and others quickly put in hundreds of millions of dollars into the company. 

Why is there a surge of AI companies building LLM in China? Ever since ChatGPT was launched, big techs as well as AI companies across the world have been racing to build their own LLMs – a very expensive arms race in terms of talent and compute power (chips and electricity). 

The urgency is more intense in China under the current geopolitical environment, where the US banned export of AI training chips to China, and China blocked access to many American LLMs, as we mentioned in Momentum Works The Future, by ChatGPT report. 

Light Year’s journey took an unexpected turn a few days ago, when Wang, who is 45 years old, was hospitalised for ‘severe depression’. Meituan take over followed quickly afterwards. 

There are personal, strategic and economic angles to interpret Meituan’s acquisition of Light Year. Some of our thoughts: 

  1. Building AI companies is tremendously difficult, capital intensive and uncertain. Even in the West, Google, Meta, etc. have spent years and billions of dollars to build up their own LLMs, and OpenAI took in billions of dollars of investment from Microsoft. In China, Baidu’s Ernie bot has been widely ridiculed (although we feel the ridicule was not justified). For other, smaller and newer, LLM contenders, the future is very uncertain;

  2. There are speculations that Wang’s depression was due to this. From a personal angle, Wang Huiwen was Meituan founder Wang Xing’s (not related) university classmate, and had been Meituan’s Number 2 for years. Part of the rationale of the acquisition was probably to help a brother who had been in the trenches together. This shows leadership;

  3. From a strategic angle, the deal is obviously good for Meituan. Meituan has been taking initiatives to deepen its moat. Especially when Douyin (TikTok’s China version) and Alibaba are both trying very hard to chip away Meituan’s market share in food delivery and merchant advertising. Meituan has been investing about 10% of its annual revenue on R&D in areas including autonomous vehicles and drones. Meituan, which is also betting on live streaming and has millions of merchants on its platform, will likely find many new use cases from generative AI development;

  4. We mentioned in Momentum Works’ recent Ecommerce in Southeast Asia 2023 report that generative AI has four major potentials for platforms, including providing a new way of interfacing customers. Imagine in future if you could order food delivery, ride, and every other local service using a generative AI chatbot, reliably;

  5. To speed up development, Light Year had earlier acquired a significant stake in AI company OneFlow, founded by famous researcher Yuan Jinhui. With Light Year acquisition, Meituan has secured a complete set of team and assets to become a relevant player in generative AI;

  6. From an economic angle, the amount Meituan spent to acquire Light Year matches almost exactly the cash assets Light Year has on its books. Investors get their cash back, with no upside or losses. This is a fair deal to both Meituan and Light Year investors. 

Overall, this is good news to other contenders of Chinese LLM mentioned above. A graceful exit of a major contender shows others they can afford to call off a rat race. It also reminds us that building generative AI companies requires long term commitment and significant resources. Most importantly, it also shows the camaraderie of Meituan’s top leaders. 

How relevant can these tech developments be to your career and workplace? Engage Momentum Academy ([email protected]) for leadership briefings where we deep dive into Meituan leadership, people and business strategies.    


Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].


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Jianggan Li is the Founder & CEO of Momentum Works. Prior to founding Momentum Works, he co-founded Easy Taxi in Asia, and served as Managing Director of Foodpanda. The two years running Rocket Internet companies has given him a lifetime experience on supersonic implementation, and good camaraderie with entrepreneurs across the developing world. He holds a MBA from INSEAD (GMAT 770) and a degree in Computer Engineering from Nanyang Technological University. Unfortunately he never wrote a single line of code professionally - but in his first job he was in media, travelling extensively across Asia & Europe, speaking with Ministers & (occasionally) Prime Ministers. Apart from English and his native Mandarin, he is also fluent in French and conversational in Cantonese & Spanish. He tried to learn Latin (for three years) and Sanskrit (for six months) as well. In his (scarce) free time, he reads, travels, hikes and dives. Pyongyang, Tehran & Chisinau are among the interesting cities he has been to.