Chinese Local Government Joins Forces With VC Firm To Back New AI Industry Fund

An industry investment fund specialized in the new generation artificial intelligence (AI) technology was debuted in eastern China’s port city of Qingdao on Thursday, seeking to promote the AI development and application in the city with the support of the Chinese government.

The new fund was jointly launched by Chinese venture capital firm Zhejiang Lianfeng Yueheng Investment Management, and Artificial Intelligence Technology Innovation Strategic Alliance (AITISA), a Chinese government-guided organization founded in July 2017 to join the forces of enterprises, scientific research institutions, universities, and investment companies in the AI industry. Zhejiang Lianfeng Yueheng Investment Management is managed by former executives of blue-chip investment firms like CDH Investments and Cathay Capital.

The two parties are yet to unveil the size of the new fund. A group of companies, including state-owned investment platforms Jufeng S&T Venture Investment and Qingdao City Construction Investment, will pour money into the new fund, said Zhao Yan, mayor of Laoshan District of Qingdao City, cited by Chinese official media China Economic Times.

The fund, with a focus on "innovation and growth opportunities in the development and application of AI technology," will help construct "a new investment pattern" that combines the government guidance with the market trend, the official media commented.

The Chinese authority is ramping up efforts to speed up the AI development in the country. The industry scale of key AI technologies in China is expected to reach RMB96 billion (US$14.32 billion) in 2019, up 40% year-on-year, according to a report released at an industry forum in Beijing in March. Such prediction came after the State Council, the chief administrative authority in China, introduced a development plan to place AI as one of the major national strategies in July 2017.

Backed by the scientific research and innovation strengths of AITISA and the professional investment platforms, the new fund has "an in-built advantage" to help transform academic results into real-life applications, said Jiang Duntao, secretary of the Laoshan District Party Committee in Qingdao.

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