Chinese multinational electronics company Xiaomi is among the investors considering funding round for artificial intelligence (AI) and autonomous driving chip maker Black Sesame Technologies worth at least $231 million.
According to sources, the fundraising could value the Shanghai-based chipmaker at up to $1.5 billion.
As soon as next year, Black Sesame is planning an initial public offering (IPO) on China’s technology-focused Shanghai STAR board. Before any future IPO, at least one more round of investment is planned.
Xiaomi has poured billions into a slew of startups to expand its mobile and online ecosystem, but a deal with Black Sesame will be the company’s first move into the automotive sector after unveiling a $10 billion initiative to develop electric vehicles.
According to its website, the startup, which designs AI chips and systems for vehicles, has major auto industry clients such as German-based Robert Bosch GmbH, SAIC Motor Corp., and BYD Co.
The size and value of the fundraising could adjust, while IPO talks are still in the early stages and the company could decide not to seek a listing. Black Sesame and Xiaomi representatives declined to comment.
Xiaomi’s billionaire Co-founder Mr. Lei Jun revealed last month that the company expects to spend $10 billion in the production of electric vehicles over the next decade.
The Chinese smartphone maker has joined the ranks of tech giants such as Apple Inc. and Huawei Technologies Co. in focusing on the automotive industry, betting that future cars will become more autonomous and connected. Xiaomi will outsource car assembly to contract manufacturers, a model it uses for its smartphones.
Black Sesame
Black Sesame, which was founded in 2016, is an AI company that specializes in image processing, perception algorithms, and system-on-a-chip design. According to the website, it employs about 300 people, with 80 percent of them working in research and development.
The company is one of a rising number of Chinese chipmakers and tech behemoths looking for funding to build semiconductors for AI algorithm training.
China has promised to expand its domestic semiconductor industry while decreasing its dependence on American technology. A surge in data-intensive applications such as high-resolution video games and cryptocurrency mining has fuelled demand for semiconductors capable of performing AI tasks such as machine learning in recent years.
US-based Nvidia Corp. currently leads the global AI chip market, but Amazon and Alphabet Inc.’s Google have both invested in their bespoke server silicon.
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