He built Dify in China. Now Luyu Zhang is scaling it in Silicon Valley.
Luyu Zhang arrived in the United States last year with little English and little time to learn it. “I’m too busy with work right now to improve my English,” he said through a translator in a temporary office in Menlo Park. The CEO of artificial intelligence startup Dify is among a growing number of Chinese founders relocating their families and companies to Silicon Valley, betting that the Bay Area remains the arena for global-scale AI.
On the face of it, the move looks counterintuitive. Washington has tightened export controls on advanced AI chips, and lawmakers have warned for years about intellectual property theft and China’s military and economic ambitions. Talk of decoupling is constant on both sides.
Zhang’s calculation is straightforward: to build a global AI infrastructure company, plant it where the fiercest competition lives. A middle-school dropout and coding prodigy, Zhang recently raised $30 million at a $180 million valuation from HSG (formerly Sequoia Capital China) and other Asian venture firms GL Ventures, 5Y Capital and Mizuho Leaguer Investment.
Before launching Dify, he worked at multiple startups and later managed a large engineering team at Tencent. Dify began as an open-source project offering developers a low‑code interface to build AI applications without extensive back‑end work. It now ranks 52nd among the most-starred repositories on GitHub.
The company built around it employs 100 people, is profitable and serves more than 280 enterprise customers, including Volvo, ThermoFisher Scientific and Novartis. Zhang points to Meta’s proposed $2 billion acquisition of Manus—an AI startup founded in China before relocating to Singapore—as a possible blueprint, calling it a “China origin + overseas operation” model.
Manus has faced scrutiny on both sides: U.S. regulators examined an investment by venture firm Benchmark, and Chinese regulators are reportedly considering whether to block Meta’s acquisition. For Zhang, the takeaway is that building a truly global company from within China is difficult.
He argues the country’s tech ecosystem is largely self-contained, with most software built primarily for the domestic market. “If you’re an elite athlete, you don’t play only to win local matches. You train to compete in the Olympics,” he said. “For a technology company building infrastructure for the AI era, Silicon Valley is our Olympic arena.
We want to compete at the highest level.” Zhang says he knows nearly 20 Chinese startup founders currently relocating to the U.S.
Investor Lake Dai, formerly head of product at Alibaba and now founder of Sancus Ventures, describes the shift as broader: in the past two years, she says, at least 100 Chinese entrepreneurs have contacted her about moving to the United States, as foreign capital pulls back from China and venture funding tightens.
Dai is not an investor in Dify. Founders are also mindful of political sensitivities. Many downplay where they were born and stress what their products do to avoid being pigeonholed early, Dai said. Dify does not hide its Chinese roots, and while Zhang says he is hiring aggressively in the Bay Area and Tokyo, the company’s core open-source engineering team of 60 remains in China.
For Zhang and his peers, the strategy is a balancing act: build globally while navigating geopolitical headwinds. The bet is that proximity to the world’s largest customers, developers and rivals outweighs the risks—and that the Olympic arena is still in Silicon Valley.