Artificial intelligence (AI) startup Yitu is considering a listing on China’s new Nasdaq-style tech board, Bloomberg reported, citing people familiar with the matter.

Why it matters: News of the possible listing comes shortly after rival AI firm Megvii submitted an IPO prospectus to the Hong Kong stock exchange, the first Chinese AI company to make such a move.

  • AI technologies from both companies are used widely in China and they are key suppliers to the country’s public security organs.
  • China is home to a growing number of AI startups, several of which have their eyes on capital markets.

Details: Yitu reportedly plans to list on Shanghai’s Star Market as early as this year, according to the Bloomberg report.

  • No details of the listing have so far been revealed. The sources did not indicate how much Yitu is hoping to raise by going public.
  • Since Yitu has not officially filed for an IPO, its financial position is unclear. However, Star Market allows unprofitable companies to apply for a listing.

Alibaba-backed AI startup Megvii files for Hong Kong IPO

Context: The IPO plans come amid government calls to stimulate China’s high-tech development, with ambitions to become a world leader in AI by 2030.

  • The country is home to the world’s most valuable AI startup, Sensetime, though the company has not made public any plans for a listing.
  • Before filing, Megvii had reportedly been reconsidering its IPO plans as a result of the ongoing US-China trade tensions.

Bottom line: China’s AI companies are looking to tap capital markets as venture funding slows and investors raise questions about the prospective profitability of these firms.

Chris Udemans

Christopher Udemans is TechNode's former Shanghai-based data and graphics reporter. He covered Chinese artificial intelligence, mobility, cleantech, and cybersecurity.

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