The promise of artificial intelligence has yet to translate into big business. Now, Lee Kai-fu (李開復), a prominent venture capitalist in China and founder of Sinovation Ventures (創新工場), said that his firm’s new start-up should be able to reach US$100 million in revenue next year and go public the year after.
AInnovation, established in March last year, develops artificial intelligence (AI) products for companies in industries such as retail, manufacturing and finance. Its customers include Mars Inc, Carlsberg A/S, Nestle SA, Foxconn Technology Group (富士康科技集團), China Everbright Bank Co (光大銀行) and Postal Savings Bank of China Co (中國郵政儲蓄銀行).
AInnovation CEO Hocking Xu (徐輝), a veteran of International Business Machines Corp and SAP SE, has hired staff that work with traditional companies to figure out how to take advantage of AI in their operations.
AInnovation is on track to hit US$100 million in revenue within two years of its founding, the fastest pace yet for such a start-up, Lee said.
“We took the approach of: ‘Let’s take some of the best businesspeople and let’s target the industries which need AI the most,’” he said.
Lee projected that AInnovation will be able to go public in less than two years at a valuation of US$1 billion to US$2 billion. The firm has raised about US$70 million from Sinovation, CICC ALPHA (中金甲子) and Chengwei Capital (成為資本).
As the company was funded with yuan, it would most likely list domestically, either on China’s new NASDAQ-like STAR Market or on ChiNext.
For retail companies, AInnovation sells products including a smart vending machine that opens with facial recognition and software that monitors retail shelves with image recognition.
It has created computer vision technology that detects defects on the production line for manufacturers and underwriting software and natural language processing technology for financial firms.
There is a large market in particular for technology to catch flaws early in the manufacturing process, said Jeffrey Ding, a researcher with Oxford’s Center for the Governance of AI.
That effort “aligns with the Chinese government’s priorities to upgrade smart manufacturing capabilities to compete with countries like Germany and Switzerland,” he said in an e-mail.
The former president of Google China, Lee founded Sinovation Ventures in 2009. It manages more than US$2 billion across seven funds in the US and Chinese currencies.
It holds shares in more than 300 companies, most of which are in China. Its investments include autonomous driving company Momenta, consumer AI chip firm Horizon Robotics Inc and bitcoin mining and AI chip company Bitmain Technologies Ltd.
In artificial intelligence, “we’re still at a very early stage in the commercialization,” Lee said. “We’re still at the equivalent of early Internet portals, back when everybody was using Yahoo and there wasn’t even a Google, Amazon, or Facebook.”
However, global economic ructions might present short-term challenges. Venture deals in China have been plummeting as investors pull back amid escalating trade tensions and slowing economic growth.
The value of investments in the country tumbled 77 percent to US$9.4 billion in the second quarter from a year earlier.
“In an economy that’s slowing down, everything slows, including venture capital. There will definitely be a shakeout,” Lee said. “The positive side is that if the economy is challenging, and valuations are down, it’s a good time for us to go shopping.”
TV and online retailer Momo.com Inc (富邦媒體) yesterday said it has set up a new logistics subsidiary, Fu Sheng Logistics Co (富昇物流), to oversee the company’s extensive shipping operations. Leveraging Momo’s 23 satellite warehouses and distribution centers nationwide, Fu Sheng will be in charge of executing the retailer’s same-day shipment plan for deliveries in Taipei, New Taipei City, Taoyuan, Taichung, Tainan and Kaohsiung, Momo said in a press release. Seeking to further shorten its supply chain, the company is to set up another seven satellite warehouses and distribution centers by the end of the year. “Fu Sheng has a fleet of 200 couriers
US-CHINA TENSIONS: The company said that it supplies self-designed chips to the Chinese company and, as such, is not affected by the latest US export restrictions Macronix International Co (旺宏電子) said it does not expect its shipments of memory chips to Huawei Technologies Co (華為) to be affected by the latest US export restrictions on the Chinese tech giant. “As long as the company [Huawei] places orders, we will ship [chips], unless the [Taiwanese] government restricts all Taiwanese companies from shipping” to Huawei, Macronix chairman and chief executive officer Miin Wu (吳敏求) said on Monday in Hsinchu. The US Department of Commerce on Friday took a further step to block chip supplies from non-US companies to Huawei by requiring foreign semiconductor makers to get US government permission before
‘ACCORDING TO PLAN’: A company official said that it has set up production sites worldwide to provide services and that its Wisconsin project was going smoothly Hon Hai Precision Industry Co’s (鴻海精密) smart manufacturing center in Wisconsin would begin trial manufacturing in the middle of this year, the company said yesterday, adding that it plans to build a research institute to develop key technologies to support growth over the next five years. Hon Hai, known internationally as Foxconn Technology Group (富士康科技集團), said in an annual report submitted to the Taiwan Stock Exchange that its planned Foxconn Institute for Research in Science and Technology would conduct research into artificial intelligence, next-generation communications, quantum computing, cybersecurity and nano semiconductors in Taiwan. Hon Hai is to make products at the center
E Ink Holdings Inc (元太科技), the world’s sole supplier of e-paper displays for e-readers and shelf labels, posted its best quarterly net profit for the first quarter in nine years amid increased demand during a traditionally slow season. Net profit soared 80 percent to NT$787 million (US$26.23 million) in the quarter ended March 31, compared with NT$438 million a year earlier. That translated into earnings per share of NT$0.69, up from NT$0.39. E Ink posted lower royalty income of NT$371.23 million last quarter from NT$448.74 million a year earlier, a company financial statement showed. E Ink said that it expects royalty income to