China Kunlun Tech subsidiary set for AI firm stake buy, $400 mln capital boost
14/06/2023 17:54
June 15 (Reuters) - Kunlun Tech 300418.SZ is planning
a $400 million capital boost for a subsidiary expected to buy a
stake in an artificial intelligence firm via a share issue, as
Chinese tech firms ramp up efforts to develop rivals to
Microsoft-backed OpenAI's ChatGPT.
A global AI buzz kicked off by ChatGPT has spread to China,
prompting a flurry of domestic companies including Alibaba and
Huawei to announce similar projects and igniting venture funds
and tech firms' interest in betting on startups that could be
China's answer to OpenAI.
Kunlun Tech said late on Wednesday its holding subsidiary
Star Group Interactive Inc has agreed to acquire the entire
equity in Singularity AI Technology Limited, which is working
with Kunlun on a large language model, via share issue.
Singularity AI's entire equity is priced at $160 million in
this deal, and its current shareholder, Singularity AI Holdings
Limited, will subscribe for a total of 206.7 million newly
issued shares of Star Group, according to Kunlun Tech's filing.
After the acquisition, Star Group will receive another $400
million from its biggest shareholder, a wholly owned unit of
Kunlun Tech, the filing showed.
A potential intensification of competitions with major tech
companies, and the "policy risks" as Chinese regulators are
expected to apply cyber security and data safety rules to the AI
algorithms, are among the challenges facing Singularity AI, said
Kunlun Tech.
Singularity AI reported a net loss of 23.7 million yuan
($3.32 million) in the first three months of 2023 and 10.9
million yuan in full year 2022, the filing showed.
Reuters reported earlier this month citing sources that
Chinese startup MiniMax, also working on ChatGPT-like solutions,
was near completing a fundraising of more than $250 million that
would value it at about $1.2 billion including the new capital.
($1 = 7.1470 Chinese yuan renminbi)
(Reporting by Roxanne Liu and Kane Wu; Editing by Toby Chopra)
((hongkong.newsroom@thomsonreuters.com; （8610）6627-1277;
Reuters Messaging: roxanne.liu@thomsonreuters.com))