5Y News | Hyperparameter Tech Closes $100 Million Series B to Build "Living AI"

五源资本·January 4, 2022

Redefining the relationship between AI and humans.

On January 4, 2022, Parametrix.ai announced the completion of its $100 million Series B funding round, led by HSG with follow-on investments from existing shareholders 5Y Capital and Gaorong Capital.

Founded in early 2019, Parametrix.ai is dedicated to transforming game content production through artificial intelligence, creating "living AI," and redefining the relationship between humans and AI. Parametrix's founder, Yongsheng Liu, previously served as General Manager of Tencent AI Lab and a T4-level technical expert. The team began exploring game AI as early as 2015, building world-class Go AI "FineArt" and Honor of Kings AI "Wukong," and was the first in the industry to achieve breakthroughs in 3D FPS game AI. 5Y Capital has supported Parametrix through multiple consecutive funding rounds since its founding in 2019.

Yongsheng Liu

Founder, Parametrix.ai

Parametrix speaks of "creating living AI and redefining the relationship between AI and humans." When did you start to believe that AI could be alive? What will the relationship between AI and humans look like in the future?

Yongsheng Liu: Back in 2016, when we were working on the FineArt project, AI already held a special fascination for me. AI is like our "child" — we live with it day in and day out. Under our patient, careful guidance, it sometimes makes mistakes, sometimes acts mischievous, and sometimes amazes us. It keeps improving, as if it can sense our expectations.

For most AI startup teams, AI is simply a more obedient, more efficient tool, and the end result of AI development is disruption of existing industries. But in our eyes, AI represents a new form of life, equal to humans. It can spark new creativity, create new experiences, and become something people genuinely enjoy.

What changes have you experienced since starting your company, and do you welcome them?

Yongsheng Liu: The most obvious change has been the significant increase in external communication — with entrepreneurs from different fields, investors, partners, and domain experts. At first, I found it quite uncomfortable. I spent a lot of time but seemed to gain little. As the frequency of these exchanges increased, I found I couldn't do without them. Almost imperceptibly, they broadened my horizons — exposing me to cutting-edge thinking, interesting people and stories, and management approaches.

What's the most important lesson you've learned about management since founding the company? And how do you personally keep learning?

Yongsheng Liu: The biggest lesson in management is that management is hard. No one is born a manager. The maturation of a company's CEO and core team requires enormous time and effort. Fisher (Fei Zhang) told me something at the start of my entrepreneurial journey that I'll never forget: "The starting point isn't what matters most — what matters most is the acceleration of learning." So beyond tracking business progress, I regularly review the growth of each core management team member, especially the CEO myself. There are many ways to learn management knowledge; that's not the hard part. The hard part is putting it into practice. Our experience over the past two years has been that eight or nine out of ten management problems the team faces stem from breakdowns in communication up and down the chain. Building a scientific, effective communication mechanism remains a formidable task.

Yunfeng Shi

Senior Investment Manager, 5Y Capital

How do you view Parametrix's growth trajectory and future potential?

Yunfeng Shi: Kakar (Yongsheng Liu) is an entrepreneur with exceptionally fast acceleration. I've observed that since starting his company, his mindset has become increasingly open, and his approach to exploring open-ended, unknown questions has steadily improved. The intersection of AI and gaming is precisely such a grand, open-ended proposition. AI and gaming also form an extraordinarily elegant mirror-image pair: AI compresses reality into a lower-dimensional vector space, while games release a beautiful new world from vectors and physical rules. Gaming is called the ninth art, and I believe AI's ability to deliver personalized experiences for players can generate value comparable to what AI has created in video distribution and creation. A clear trend today is that platforms worldwide are becoming more open, and Parametrix's AI already serves players across multiple world-class games. Could we one day see player-owned AI that accompanies gamers across different virtual worlds — the perfect AI teammate?

What are your imaginings and expectations for the future of AI?

Yunfeng Shi: There are thousands of games in development in China alone. I believe every game will need to be empowered by AI in the future — just as today it's unimaginable for any content feed app to lack personalized distribution. In the era when AI powered content feed distribution, the industry never found a highly successful method to make the same algorithm universally applicable across different business scenarios. When AI meets gaming, I hope AI won't just learn one game at a time, but will be able to react to entirely new environments, self-discover, and learn games it has never encountered before. This requires AI capable of completing a series of generalization tasks not seen in its training data — from relatively simple games like hide-and-seek, to StarCraft, to whatever the next metaverse turns out to be.

Every step toward general intelligence is difficult. The good news is that reinforcement learning and self-supervised learning have made remarkable progress in recent years. I very much look forward to more work being devoted to creating flexible, general-purpose AI — whether in building simulation environments for training AI, iterating on the models themselves, or other creative breakthroughs.

In the two-plus years since its founding, the Parametrix.ai team has built deep connections with numerous top game producers and product teams, achieving meaningful results through mutual exchange.

Currently, Parametrix.ai's AI bots peak at nearly one million concurrent online users daily, serving hundreds of millions of users across over 50 countries worldwide. In multiple top-tier products with tens of millions of daily active users, the technology has been in stable operation for more than a year. Recently, Parametrix.ai also achieved the industry's first large-scale commercial deployment of AI in 3D FPS games, providing 400,000 concurrent AI bots online. In broader and more diverse scenarios, AI bots have also created substantial commercial value. Customer feedback has been overwhelmingly positive, with 100% retention and renewal rates and 120% annual repurchase rate.

As partnerships deepen, Parametrix.ai is further unlocking AI's potential — NLP-powered AI bots that can command and be commanded by users, enabling new interaction paradigms; massive numbers of "AI actors" forming vibrant AI worlds through dynamic interactions; diverse AI bots enabling entirely new approaches to content production, and more.

Since the FineArt era, the Parametrix.ai team has steadfastly believed that AI is far more than a technology, a tool, or a solution — it is a new form of life capable of bringing new creativity, stories, and experiences. Grounded in this conviction, Parametrix.ai established its mission and vision: "Create living AI, redefine the relationship between AI and humans."

In Parametrix.ai's view, today people encounter many grand narratives and visions surrounding the metaverse, yet there is an irreconcilable contradiction between the finiteness of life and the infiniteness of experience. Therefore, Parametrix.ai envisions AI as native inhabitants of virtual worlds, building rich, free, and open virtual worlds alongside humans in ways native to those worlds.

Based on this philosophy, Parametrix.ai has established an L1-L4 AI technology roadmap:

L1 is human-likeness — AI that behaves reasonably like a human, without mechanical artificiality. This is where the vast majority of AI sits today.

L2 builds on L1 with diversity — AI possessing different personalities, goals, and value orientations, with individuality and uniqueness gradually emerging.

L3 AI is massive in scale and mutually influential. Quantitative change triggers qualitative transformation, forming a complex, dynamically emergent AI society in which humans can participate and co-create compelling stories.

L4 AI will possess uniqueness and verifiable ownership — each AI will be one-of-a-kind, and humans can form bonds with one or multiple AIs, becoming willing to invest time and energy. Parametrix.ai aims to connect the complete chain of "gaming + technology + social," making AI the guide that leads humanity into virtual worlds, helping people explore, create, and connect within them.

Following this funding round, Parametrix.ai will continue increasing investment in frontier technology, external partnerships, and innovative products along its L1-L4 roadmap, maintaining its relentless pursuit of cognitive, technological, and organizational advancement.

At the same time, Parametrix.ai hopes to welcome more people who share its ideals, convictions, and values to join in building a virtual world where one billion humans and ten billion AIs live together.

5Y Capital (formerly Morningside Venture Capital) currently manages approximately RMB 32 billion in dual-currency USD and RMB funds. 5Y Capital seeks out, supports, and inspires entrepreneurs who dare to stand alone, providing support from spiritual encouragement to full operational backing. We believe that if the world begins to believe in the "crazy" you that others see, the world will become a different place.

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