China's Meituan To Acquire Artificial Intelligence Firm Light Year

Chinese food delivery juggernaut Meituan said that it is buying Light Year from its co-founder and former director Wang Huiwen in an effort to create its own generative artificial intelligence (AI).

The transaction takes place at a time when artificial intelligence has captured the attention of investors all across the world, sparking a frenzy of investments or acquisitions by companies scrambling to create generative AI like ChatGPT.

According to Meituan, the acquisition for Light Year comprises $233.7 million in cash, $366.9 million in debt, and a payment of $28 million to the AI company's previous backer HongShan, a vehicle managed by Sequoia Capital China Growth vehicle VII.

The agreement enables Meituan, in which online advertising behemoth Tencent owns an 18.7% interest, to solidify its position in China's AI market.

Light Year, founded and owned by Wang who assisted in the founding of Meituan in 2010, specialises in the study and development of huge language models and has net cash of about $285 million as of June 29.

Due to health issues, Wang resigned from his position as non-executive director of a major food delivery company.

After the acquisition is finalised, Meituan will have complete control of Light Year