China's Meituan to buy artificial intelligence firm Light Year from co-founder

(Reuters) -Chinese food delivery giant Meituan said on Thursday that it is acquiring artificial intelligence (AI) company Light Year from its co-founder and former director Wang Huiwen, in a bid to develop its own generative AI.

The deal comes at a time when AI has captivated investor interest across the globe, prompting a flurry of investments or acquisitions by businesses in a rush to develop generative AI like ChatGPT.

The total deal for Light Year includes $233.7 million in cash with 366.9 million yuan ($50.66 million) worth of debt and a payment of $28 million to the AI firm's previous investor HongShan, a investment fund by Sequoia Capital China Growth Fund VII, Meituan said.

The deal allows Meituan, in which online advertising giant Tencent holds an 18.7% stake, to strengthen its position in the AI landscape of China.

Light Year, which had net cash of around $285 million as of June 29, is involved in the research and development of large language models, and was founded and controlled by Wang who helped establish Meituan in 2010.

Wang resigned as the non-executive director of food delivery giant on Sunday due to health reasons.

Meituan will control 100% of Light Year after completion of the deal.

(Reporting by Navya Mittal and John Biju in Bengaluru; Editing by Shailesh Kuber)

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