Abstract:
Sand.ai, a Chinese artificial intelligence video generation start-up, announced on November 5 that it had completed a US$200 million A+ round of financing. The company’s valuation exceeded US$1 billion, officially joining the ranks of unicorn companies. This Beijing-based company was established just over two years ago. With the rapid development of basic video generation models and commercial products, it has become an emerging enterprise in China's AI video field that has attracted capital attention.
This round of financing attracted participation from industrial capital, government-backed investment institutions, RMB funds and US dollar investors. Chinese investment institution CoStone Capital and Shenzhen-listed Internet infrastructure company Wangsu Technology co-led the investment. Pudong Venture Capital and investment institutions affiliated with Shanghai International Group also participated in this round of financing. In addition, old shareholders iMPC (formerly known as Matrix Partners China), CAS Star and HyT Capital continue to make additional investments.
This is the third round of financing completed by Sand.ai in 2026. In the past 10 months, the company’s cumulative financing amount has reached US$300 million. Earlier this year, Sand.ai raised more than $100 million in two rounds of funding in less than five months. Previous investment institutions include Meituan co-founder Wang Huiwen’s family office Lollapalooza Capital, IDG Capital, Baidu Ventures and Sinovation Ventures led by Kai-fu Lee.
Sand.ai was founded in early 2024 by Dr. Cao Yue from Tsinghua University. The company mainly uses generative video models to reduce video production costs and shorten content production cycles, hoping to enable more individuals and companies to produce high-quality video content with a lower threshold.
Currently, Sand.ai has launched multiple video generation models. Among them, Magi-1 uses an autoregressive architecture and can gradually generate video content; GAGA-1 focuses on the simultaneous generation of audio and video, trying to achieve integrated creation of audio-visual content. In addition, the company recently released MAGI-2 Preview to demonstrate the technological progress of the new generation model to the outside world in the form of an open source research preview.
In terms of commercialization, Sand.ai’s paid AI video creation platform VidMuse has achieved initial results. The platform provides tools to generate content such as music videos, product advertisements, and animated shorts. After its official launch in January this year, its annual recurring revenue (ARR) exceeded US$10 million in just two months. This performance shows that AI video generation technology is no longer limited to model demonstrations and research experiments, and some products have begun to have the ability to directly create revenue for the market.
The funds raised in this round will be mainly used for the research and development and training of basic video models, inference infrastructure construction, product iteration and global market expansion. The company also plans to launch the official version of MAGI-2 in the near future to further improve its video generation model product system.
Cao Yue also had entrepreneurial experience before. In February 2023, he co-founded the artificial intelligence company Light Year with Meituan co-founder Wang Huiwen. Just four months later, Meituan acquired the company for $281 million in June of the same year. The establishment of Sand.ai and the rapid acquisition of large-scale financing have made Cao Yue once again a highly regarded entrepreneur in the field of AI entrepreneurship in China.
Sand.ai’s emergence into the unicorn ranks this time reflects the capital market’s continued focus on the commercialization prospects of AI video generation technology. Unlike large technology companies that rely on huge computing power and comprehensive platforms to deploy AI, Sand.ai is trying to establish its own market space by focusing on video basic models, open research models, and paid creation tools. The actual performance of MAGI-2 in the future, whether VidMuse can continue to expand revenue, and the company's expansion effect in overseas markets will become important factors to test whether its high valuation can be supported.
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