China AI chip designer Vastai raises $50m
Vastai Technologies, a China-based chip designer, has raised $50 million in Series A funding led by video-sharing platform Kuaishou, Redpoint China Ventures, and 5Y Capital.
SAIF Partners China also took part in the round. Meanwhile, all existing investors re-upped, including ZhenFund, Sirius Capital and Glory Ventures. Founded in 2018, Vastai is a spinout from the China operation of US chip designer AMD. It focuses on high-performance intelligent vision chips.
The new capital will go towards large-scale production for downstream applications of the company’s current flagship chip product, expanding the R&D team, and entering global markets. Founder and CEO Jun Qian said the goal to achieve a breakthrough in computing power by optimizing the layout of chips to meet the growing needs of artificial intelligence (AI) applications.
“Although Chinese companies are leading the way in AI applications, hardware development, and the infrastructure have been lagging behind. We firmly believe that Chinese companies will lead the next generation of global semiconductors,” said Richard Liu, a founding partner of 5Y Capital, which was formerly known as Morningside Venture Capital.
Private equity and venture capital interest in the semiconductor space stretches from new materials to equipment to chip design. However, design is considered the most attractive segment – it has the highest technology content and is the least capital intensive – so there have been a number of deals there recently.
While domestic replacement is an inevitable investment theme, some investors are betting on emerging industry segments where they feel Chinese companies can compete directly with global leaders. Artificial intelligence (AI) chips – designed to support deep-learning networks and algorithms – are perhaps the best example.
Beijing-based Cambricon Technology, which is backed by CICC Capital, Alibaba Group, and Lenovo, became the first Chinese AI chip maker to complete a domestic IPO when it listed on Shanghai's Star Market in July. Other investment activity includes Biren Technology raising RMB2 billion ($303 million) across Series A and pre-Series B rounds between June and August, and Enflame Technology securing a RMB700 million Series B in May.
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