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In 2026, among the investors who made the most money in China's large-scale model industry, there was a group that no one expected: game companies.
miHoYo received angel investment in MiniMax in December 2021, with a pre-investment valuation of only $170 million. The four institutions invested a total of $31 million.
MiniMax will be listed on the Hong Kong Stock Exchange in January 2026 with an issue price of HK$165. On the first day of listing, it will surge by 109% and its market value will exceed HK$100 billion.
Subsequently, the stock price soared to a historical high of HK$1,330. Before the IPO, miHoYo held approximately 6.4% of the shares, with a conservative paper profit of HK$10 billion.
Return multiplier: Over 100 times.
In the same month, Zhipu AI, basking in the glory of being the "world's first large-scale model stock," rang the opening bell. It listed on the Hong Kong Stock Exchange on January 8, 2026, with an issue price of HK$116.2; the stock price continued to rise for the next three months, reaching a high of HK$1010 in April.
And among its early shareholders is another game company – 37 Interactive Entertainment.
37 Interactive Entertainment's recently released Q1 2026 financial report shows a staggering 981% year-on-year increase in investment income, netting an additional 326 million yuan. The core source of this profit is the change in fair value of Zhipu after its IPO.
One company invested in MiniMax, and the other invested in Zhipu. These two game companies have practically secured the two biggest tickets to the Chinese large model racing market.
What's even more surprising is that they invested in more than just these two companies.
1. 37 Interactive Entertainment: The Four Little Dragons invested in three of them.
There is a widely accepted term in China's large model industry: "AI Four Little Dragons": Zhipu, Lunar Dark Side, Baichuan Intelligence, and MiniMax.
37 Interactive Entertainment invested in three of them at once.
First, there's Zhipu. In 2023, 37 Interactive Entertainment invested 25 million yuan in Jiaxing Beisheng Hengwo Fund, which directly or indirectly invested in Zhipu AI's equity.
In January 2026, Zhipu was listed on the Hong Kong Stock Exchange with an issue price of HK$116.2. Subsequently, the stock price once surged to HK$1,010, and the market value reached nearly HK$380 billion at its peak. 37 Interactive Entertainment recognized an increase of RMB326 million in investment income in just the first quarter.
Then comes the dark side of the moon. 37Games invested in this company early on through its participation in Shixiang Global's series of funds. In March 2026, market rumors circulated that it was advancing a new round of financing, with industry expectations for a pre-money valuation of approximately $8-10 billion.
That's not all. Baichuan Intelligent, a company that uses a general-purpose big model as its foundation and focuses on the vertical field of medical and health care, reached a valuation of 20 billion RMB after its Series A+ round in April 2026. 37 Interactive Entertainment is also on the list of shareholders.
The four little dragons voted for three companies, but not MiniMax. That vote had been held by miHoYo since the angel round.
But 37 Interactive Entertainment's investment portfolio extends far beyond the large model.
According to publicly available information, 37 Interactive Entertainment has invested in more than 30 hard technology companies, covering computing chips (Starry Sky Technology, Fangqing Technology), brain-computer interfaces (Strong Brain Technology), embodied intelligence (Lightwheel Intelligence), semiconductor materials (Jingzheng Electronics), and XR hardware (Thunderbird Glasses).
It's no exaggeration to say that 37 Interactive Entertainment has practically swept across the entire AI industry chain from top to bottom, with its investments covering the core half of the AI sector.
A listed company with revenue of 15.966 billion yuan in 2025, which started by publishing games, has made more frequent and extensive investments in the AI sector than most market-oriented venture capital firms.
II. miHoYo's "All In" MiniMax campaign yields the most profits.
Unlike 37Games' "wide net" approach, miHoYo's strategy is completely opposite; it is extremely focused.
In the large-scale AI market, miHoYo made a major bet on MiniMax. This bet, however, resulted in one of the most classic deals in the history of AI investment in China.
Let's rewind to the end of 2021. MiniMax had just been founded; its founder, Yan Junjie, left SenseTime to start his own business, focusing on general-purpose large models. At that time, ChatGPT hadn't yet become a sensation, and the market's understanding of large models was still relatively vague.
miHoYo invested in its angel round, along with Hillhouse Capital, IDG Capital, and Yunqi Capital, totaling $31 million, valuing the company at only $170 million pre-investment. Yan Junjie has a close personal relationship with miHoYo's chairman, Liu Wei, who still serves as a non-executive director of MiniMax.
More than three years later, MiniMax has become one of the world's fastest-growing AI companies. Its AI companion app, Talkie, has exploded in the North American market, with over 212 million registered users worldwide.
It listed on the Hong Kong Stock Exchange in January 2026 with an issue price of HK$165. On its first day of trading, the stock surged 109%, pushing its market capitalization above HK$100 billion. It continued to soar thereafter, with the share price reaching a high of HK$1097 and its total market capitalization exceeding HK$313 billion at one point.
Before the IPO, miHoYo held approximately 6.4% of the shares. Based on the historical high market capitalization of MiniMax, the corresponding book value of its holdings once exceeded HK$18 billion, and even by a conservative estimate, it far exceeded HK$10 billion.
Since the angel round investment at the end of 2021, the return on this investment has steadily exceeded 100 times.
What's even more interesting is that miHoYo is not only a shareholder of MiniMax, but also its client.
MiniMax's large-scale model technology has been used in "Honkai Impact 3rd: Star Railway" since 2023, with core applications including intelligent NPC dialogue and dynamic story generation. In MiniMax's prospectus, miHoYo is listed as a "leading senior independent investor," demonstrating both investment and usage, indicating a deep partnership.
miHoYo's AI strategy extends beyond this.
The company established the "Anti-Entropy Research Department" as early as 2018 and developed its own AI large model, Glossa; the digital human "Luming" has about 1.7 million followers on Bilibili, and 32 of his videos have accumulated more than 100 million views.
Wudinggu Technology, a self-developed subsidiary, was established in July 2025 with a registered capital of 500 million yuan. After stepping down from his senior position in the company in 2023, founder Cai Haoyu founded Anuttacon overseas, specializing in exploring AI-native games.
In addition, miHoYo has participated in the establishment of multiple AI investment funds, indirectly investing in fields such as AI applications, semiconductors, and XR through funds such as Shanghai Yuanchuang Future, Xiamen Wanwu Phase I, and Shanghai Tongge Phase II.
A sniper, a shopping spree machine. Two styles, the same track, both making a fortune.
III. Not just them, the entire gaming industry is making a collective bet.
37Games and miHoYo are not isolated cases. Looking at the bigger picture, the entire game industry is pouring money into the large-scale model market, and each company has its own unique approach.
Century Huatong is directly targeting computing power. As early as 2022, it invested in Moore's Threads, a domestic GPU company, through an industry fund.
Moore Threads was listed on the STAR Market in December 2025, and its stock price soared by 468% on the first day of trading. In the fourth quarter of 2025, Century Huatong contributed about 640 million yuan in net profit from this investment, accounting for 53% of its net profit attributable to the parent company in 2024.
Century Huatong has also partnered with Tencent to build the Yangtze River Delta Intelligent Computing Center, with a planned capacity of 40,000 server racks, of which 10,000 have already been delivered. A gaming company has taken on the work of building computing infrastructure.
Kunlun Tech was even more aggressive, simply taking matters into its own hands.
Since September 2023, the company has invested a total of 680 million yuan to increase its controlling stake in AI computing chip company Aijie Core, thus establishing a complete supply chain encompassing "computing power, large models, and applications." Its Skywork series of large models covers multiple fields such as multimodal reasoning, search, and music, making it one of the few game companies in China that is truly all-in on AGI.
Yoozoo Games is betting on domestic computing power. In 2025, it invested in two domestic GPU companies, Biren Technology and Xiwang. Biren Technology is already listed on the Hong Kong Stock Exchange, with a pre-investment valuation of HK$20.9 billion. Yoozoo also invested RMB 1 billion to participate in the establishment of Wuxi Yunxing Intelligent Computing, entering the AI computing power track.
Giant Interactive is betting on the product side.
We invested in AI video generation company Aishikeji and AI image generation platform LiblibAI. Their game "Supernatural Action Team" is the first product in China to deeply integrate AI large models into a game with high DAU. NPCs are driven by large models in real time, and AI participated in more than 25 million games within a week of its launch.
Tencent, as the absolute leader in the gaming industry, is also a major player in the AI investment circle. It invested in MiniMax's Series B round (holding approximately 5.7% of the shares after the IPO), invested in Zhipu AI, and invested 18 billion yuan in 2025 for its self-developed Hunyuan large model and new AI products such as Yuanbao. It plans to at least double that amount in 2026.
But Tencent is more like both player and referee, a story from another dimension.
A very interesting comparison. According to ITjuzi statistics, from January to October 2025, there were 139 financing deals exceeding 100 million yuan in China's AI field, with the total amount exceeding 60 billion yuan.
However, traditional venture capital firms are shrinking, with investment in AI model layers decreasing by approximately 52.9% year-on-year and the number of investment events decreasing by approximately 35% year-on-year, indicating that funds are rapidly concentrating on leading companies.
While VCs hesitated, game companies had already invested their money.
IV. Why a game company?
Why a gaming company, and not another industry?
The most direct reason: They are too rich.
Gaming is one of the few cash cow sectors in the Chinese internet industry. According to publicly available media reports, miHoYo's game revenue is projected to exceed 78 billion yuan in 2025, with net profit expected to surpass 40 billion yuan. Its cash reserves are larger than those of most VC-managed funds.
Since 2020, 37 Interactive Entertainment has distributed over 10.26 billion yuan in cash dividends and invested over 20 billion yuan. This money is earned internally; there's no need to explain the exit timeline to limited partners (LPs) or meet DPI targets.
VCs invest in large-scale projects, which require approval from the investment committee, calculation of the fund's lifespan, and consideration of IRR (internal rate of return); game companies invest in large-scale projects by spending their own profits, and can invest whenever they want.
But money alone isn't enough. What truly allows game companies to outperform venture capitalists in the large-scale model market is something else entirely: they themselves are the largest buyers of large-scale models.
The effects are already visible in 37 Interactive Entertainment's financial reports.
AI plays a significant role in generating over 70% of advertising materials, and AI-assisted ad placement accounts for 50%. Kimi's big model from "The Dark Side of the Moon" is deeply integrated into 37Games' customer service system and AI assistant "Ask Xiaoqi." Zhipu's GLM big model is directly used for expanding game storylines.
miHoYo takes a more direct approach, running the MiniMax models directly in their own game products, from NPC dialogues to story generation. It's not a proof of concept; it's a live product.
Game companies investing in AI are reaping not only equity returns but also tangible cost reductions. They invest money to first gain efficiency, and then to exit their investments.
VCs can't do that. Sequoia invested in MiniMax, but Sequoia itself doesn't use its tokens, nor does it have a scenario to utilize the large model. Its only way to get a return is to wait for the IPO and sell shares.
But what propels game companies forward is an even deeper force: anxiety.
The good times for the gaming industry aren't as rosy as they seem. With tighter game license approvals, soaring user acquisition costs, and user growth plateauing, the traditional model of spending heavily on acquiring traffic is no longer viable.
37 Interactive Entertainment's revenue in the first quarter of 2026 decreased by 12.3% year-on-year, but its net profit attributable to the parent company increased by 59%. The reason why revenue decreased but profits increased is that AI is reducing costs and investment is contributing to incremental growth.
When the growth logic of the gaming industry shifts from who spends the most money to who is the most efficient, AI will no longer be an elective course, but a required one.
With money, a suitable market, and anxiety, these three driving forces combined have propelled game companies into the large-scale model race faster than anyone anticipated.
V. A Bigger Story: Industrial Capital vs. Venture Capital
Looking at the bigger picture, the fact that game companies are investing in large-scale AI projects actually reflects a larger trend. In the Chinese AI investment arena, industrial capital is pushing venture capitalists to the sidelines.
After MiniMax went public, among the investors who received returns exceeding $1 billion, Alibaba ranked first (holding approximately 13.66% of the shares before the IPO), miHoYo ranked second (holding approximately 6.4% of the shares before the IPO), and Sequoia China ranked third (holding approximately 3.81% of the shares before the IPO).
After its IPO, Zhipu attracted investments with returns exceeding $1 billion, including Legend Capital, Meituan, and Ant Group, with leading industrial and venture capital firms among the top investors.
Between 2025 and 2026, the biggest exits in China's large-scale model sector—Zhipu, MiniMax, and Moore Threads—were almost all backed by industrial capital. It's not that venture capitalists (VCs) are incapable, but rather that industrial capital possesses a unique identity that VCs can never have: they are also buyers of AI.
VCs invest in AI by betting on the future, while industrial capital invests in AI to solve immediate problems. This difference may not be apparent at the exit stage, but it is significant at the moment of investment decision-making.
When miHoYo bet on MiniMax at the end of 2021, few people in the market believed that large-scale models could be a viable business.
But miHoYo believed it, not because it had any advanced AI knowledge, but because it knew exactly what it needed: a foundational technology that could drive NPCs, generate storylines, and make the virtual world more realistic. MiniMax happened to be doing just that.
37 Interactive Entertainment invested in Zhipu and Moon's Dark Side not because they conducted any sophisticated market analysis, but because they spend billions of yuan annually on user acquisition and urgently need AI to reduce these costs. Zhipu's GLM model and Kimi's ability to handle extremely long texts are perfect for this.
This logic of "I invest because I can use it myself" is something that no VC can imitate.
The stories of 37Games, miHoYo, and even gamers are actually answering a bigger question: In the AI era, what kind of companies are best suited for early-stage investment?
The answer may not be the investment institutions, but rather the companies that are themselves the biggest users of AI.
They can see the true value of technology earlier, make decisions faster, and participate more deeply in the growth of their portfolio companies because they are not just investing, but investing in their own future.
This time, game companies are ahead of venture capitalists and ahead of the times.
A note outside the main page:
The gaming industry has always been an awkward presence in the Chinese business world.
It makes money, but it's not quite right. It has the technology, but it doesn't feel cutting-edge. It's a large company, but it's categorized under entertainment, so it doesn't really qualify as high-tech.
But in this round of large-scale development, game companies have unexpectedly taken center stage. With ample cash, realistic scenarios, a strong technological sense, and a global perspective that is not typically found in industrial capital, the idea of expanding game exports has been around for a decade.
This is probably the biggest advantage of industrial capital: it doesn't need others to explain whether AI is useful or not, because it uses it every day.
