Exclusive: China's CDH, SenseTime raising about $450
million AI fund - sources
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[October 31, 2017]
By Julie Zhu
HONG KONG (Reuters) - China's CDH
Investments and Hong Kong-based start-up SenseTime Group are raising
about 3 billion yuan ($453 million) to invest in firms working on
artificial intelligence (AI) technology, two sources with knowledge of
the matter told Reuters.
The companies' plan for the fund, which according to the sources will be
mainly used to invest in growth-stage AI start-ups worldwide, comes amid
Beijing's drive to be a leader in the technology that is increasingly
becoming key to various sectors.
Once the preserve of researchers, AI has grabbed the attention of
businesses from healthcare to financial services looking to use
algorithms to comb through large troves of data to recognize patterns
and solve problems. The technology is set to spread to driverless cars
and service robots in the future.
Beijing-based investment firm CDH and SenseTime, which provides
technology-based applications like facial recognition, video analyzing
and autonomous driving, will act as co-managers of the fund, known as
general partners, one of the sources said.
It was not immediately clear when the fundraising would be completed or
who would be the potential investors.
The sources declined to be named as the capital raising plans were not
public. CDH and SenseTime declined to comment.
In July, SenseTime had raised $410 million, led by CDH and China's
state-backed fund Sailing Capital, in a deal that marked one of the
largest fundraising rounds by an AI firm and valued it at over $1.5
Last October, the state think-tank Chinese Academy of Sciences and
investment firm Hillhouse Capital Group launched one of the country's
first AI-focused funds, with an initial fundraising target of 1 billion
yuan ($150 million).
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Chinese search engine giant Baidu Inc, which is making a big push into AI,
opened the first national AI lab in March in partnership with the powerful state
planner - the National Development and Reform Commission.
CHINA'S BIG AI PUSH
The hectic fundraising activity linked to the technology comes after Beijing in
July unveiled an AI development plan to grow the country's core AI industries'
value to more than 150 billion yuan by 2020 and 400 billion yuan by 2025.
With this major push into AI, China is looking to rival U.S. market leaders such
as Alphabet Inc's Google and Microsoft.
Beijing’s AI plan comes as the United States is poised to bolster its scrutiny
of investments, including artificial intelligence, over fears that countries
including China could access technology of strategic military importance.
China's State Council in July said the "situation with China on national
security and international competition is complex", which was part of the
incentive for making a domestic AI push.
SenseTime, a three-year-old AI firm, counts China's Ministry of Public Security
and domestic heavyweights including China Mobile, HNA Group and Huawei
Technologies [HWT.UL] as its major clients.
CDH, backed by Singapore's sovereign wealth fund GIC [GIC.UL] and International
Finance Corporation, has about $18 billion worth of assets under management and
its portfolio firms include the world's largest pork supplier WH Group.
(Reporting by Julie Zhu, additional reporting by Sijia Jiang; Editing by Sumeet
Chatterjee and Himani Sarkar)
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