Xiaomi, the Chinese smart device and internet service company, and Shunwei, a China-focused venture capital fund with Xiaomi CEO Lei Jun as founding partner and chairman, have invested RMB1.6 billion (just over US$300 million) in iQiyi, the online video business majority-owned by Baidu, Xiaomi announced today.

This deal represents the largest investment made in the four-year history of Xiaomi this far. Baidu also has increased its stake in iQiyi and is still the majority shareholder.

Earlier this month Xiaomi announced plans to invest US$1 billion or online video and other digital contents. Besides the iQiyi deal, it has also bought shares in Youku Tudou, the leading Chinese video website.

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Tracey Xiang

Tracey Xiang is Beijing, China-based tech writer. Reach her at traceyxiang@gmail.com