Chinese food delivery giant Meituan said on Thursday that it is acquiring Beijing Lightyear Technology, an artificial intelligence (AI) startup that focuses on research and development of large language models.

The total deal for Lightyear includes $233.7 million in cash and debt worth 366.9 million yuan ($50.66 million), as well as a $28 million payment to the investment fund of Sequoia Capital China Growth Fund VII, a previous investor in this AI company, Meituan said.

Upon completion of the transaction, Meituan will have 100% ownership of Lightyear, a company with a team of approximately 70 individuals, most of whom are highly skilled AI talents.

With the ambition of creating China's OpenAI, Wang Huiwen, co-founder of Meituan, set up Lightyear in February with a personal investment of $50 million. Wang Huiwen is also a close friend of Wang Xing, co-founder, chairman and CEO of Meituan.com.

The startup reportedly raised a second round of funding at a valuation of more than $1 billion in April, but then Wang Huiwen said in a private WeChat post that the valuation and size of the funding were inaccurate.

A few days before Meituan made its acquisition announcement, Wang Huiwen resigned as a non-executive director, member of Meituan's board nominating committee, and authorized representative of the company, citing "personal health issues.

Sources from Lightyear said that Wang Huiwen's departure may have some impact on the company's overall operations.

Chinese tech giants are in an arms race to launch their own generative AI products. Currently, Alibaba and Baidu are leading the way in launching their own LLMs and LLM-powered chatbots, followed by Tencent and ByteDance, which have yet to launch in-house LLMs but instead embed other LLMs in their cloud to serve corporate clients.

Through the acquisition of Lightyear, Meituan is expected to strengthen its competitiveness in the fast-growing AI industry.