Online content community operator Zhihu Inc. (ZH.US; 2390.HK) said on Sunday it has agreed to invest 1.5 billion yuan ($223 million) in Tianjin Lisi Xingshen Equity Investment Partnership, a fund that will invest in early- to mid-stage companies in AI and related technologies. The investment is still subject to shareholder approval.
The investment will give Zhihu up to 30% of the fund. Zhihu said it believes the investment will enable it to leverage the fund manager’s sector expertise, industry resources and investment capabilities to broaden the company’s access to high-quality AI and technology investment opportunities.
Zhihu is making the investment as large language models undermine its own business, which traditionally centered on knowledge-sharing between its members. Its revenue has been falling in the face of that challenge, including a 3.8% decline to 690 million yuan in the second quarter of this year from 717 million yuan a year earlier.
The company is looking to focus more heavily on leading-edge topics and offline events to remain relevant to its users in the face of the AI challenge.
Zhihu’s shares fell 2% to close at HK$6.80 on Monday in Hong Kong after the announcement. The stock is down about 20.5% this year.
By Doug Young
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