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 recognise 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 analysing 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 billion.
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).
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 as its major clients.
CDH, backed by Singapore`s sovereign wealth fund GIC 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.
($1 = 6.6255 Chinese yuan renminbi)
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.