Alibaba Group Holding Ltd. and Tencent Holdings Ltd. are among the influential Chinese investors that invested 2.5 billion yuan ($342 million) in AI startup Zhipu this year, part of a wave of capital flowing into a red-hot arena.

The country’s two largest tech firms joined rivals and peers from Ant Group Co. to Xiaomi Corp. in backing Beijing Zhipu Huazhang Technology Co., one of several private firms trying to build domestic rivals to OpenAI’s ChatGPT. HongShan, the former Sequoia China, and food delivery leader Meituan also took part, according to a company statement. Many of the same companies joined a recent $300 million round of financing for Zhipu-rival Baichuan.