Chinese state-backed voice recognition giant iFlytek has revealed a 1.19 per cent stake in Cambricon Technologies, the country’s AI chip unicorn worth $2.5 billion, ahead of the latter’s targeted initial public offering (IPO) on the Nasdaq-style STAR Market.
iFlytek, which was listed on the Shenzhen Stock Exchange, replied to public inquires on late Wednesday that the firm currently holds 1.19 per cent shares in Cambricon, as part of efforts to promote its AI development and investment in the upstream and downstream value chain.
The disclosure comes a few days after Beijing-based Cambricon announced to have hired Chinese investment bank CITIC Securities in December 2019 to offer pre-IPO guidance, according to information updated on the China Securities Regulatory Commission on February 28.
“Cambricon will speed up its development with the help of the capital market post the IPO, providing better products to customers while generating higher returns to investors,” said iFlytek in one of the replies.
Following a successful IPO, Cambricon will become the first AI chip provider to list on the STAR Market, joining another 91 domestic companies which boast a combined market capitalisation of nearly 1.44 trillion yuan ($207 billion) as of March 3.
Cambricon was created in March 2016 by Chen Yunji and Chen Tianshi, two Chinese brothers working in a research lab at the Chinese Academy of Sciences (CAS). The company focuses on the development of computer chips tailored for AI applications.
The company was valued at $2.5 billion after it closed hundreds of millions of U.S. dollars in a Series B round of financing in June 2018.
Its long list of big-name investors was mainly composed of Chinese state-linked funds, as well as Alibaba Group and iFlytek, two of the four companies named by the government in 2017 as the national AI partners in an ambitious goal to build global technology leadership.
Hefei-based iFlytek, also a partially state-owned company, projected its 2019 revenue to surpass 10 billion yuan ($1.44 billion) due to healthy development in the core AI business, according to a company statement on February 3.
The company, along with seven other Chinese firms including facial recognition giants SenseTime, Megvii and Yitu, were blacklisted by the United States in October 2019, essentially banning them from purchasing components from US companies.
iFlytek issued a statement on Tuesday (March 3) that it has received an export license from the U.S. Department of Commerce to buy medical supplies to help combat the coronavirus, which has claimed nearly 2,990 fatalities in China as of March 4.