China has created a new artificial intelligence (AI) investment fund, with an initial capital of 60 billion yuan (US$8.2 billion), days after the United States further tightened export controls for advanced semiconductors and placed more Chinese companies on its trade blacklist.
The National AI Industry Investment fund was incorporated in Shanghai last Friday as a joint venture of state-backed Guozhi Investment (Shanghai) Private Equity Fund Management and the China Integrated Circuit Industry Investment Fund (CICF) Phase III, according to information from local business registry service Qcc.com.
The new AI fund’s scope of business includes general equity investment and asset management, according to the registry service, which did not provide any details.
Its creation reflects Beijing’s determination to advance the nation’s AI capabilities, despite greater tech restrictions imposed by Washington.
Bejing made AI a national priority amid a heightened tech war between the world’s two largest economies. While the central government shores up its support for the nascent sector with favourable policies and mandates, China’s AI market is expected to be worth 5.6 trillion yuan by 2030, according to state-backed investment vehicle China International Capital Corp.
The US Department of Commerce last week added more than two dozen Chinese entities to its Entity List, accusing them of supporting Beijing’s military advance. Blacklisted companies are barred from buying goods or services from US tech suppliers without a licence, which is generally denied.
Chinese start-up Zhipu AI and chip designer Sophgo – a firm whose Taiwan Semiconductor Manufacturing Co-made chip was found illegally incorporated into a Huawei Technologies AI processor – were among those recently put on the Entity List.
Beijing-based Zhipu AI said it “strongly disagrees” with the US sanction because it “lacks factual basis”. Sophgo has previously denied any wrongdoing.
Days before the latest blacklist announcement, the outgoing Biden administration unveiled new restrictions that would cap AI chips and technology exports to most countries; completely block these exports to China, Russia, Iran and North Korea; and allow nearly unlimited access for Washington’s closest allies.
California-based Nvidia, a leader in advanced graphics processing units used to power data centres that train AI models, said the broad rules amounted to a “sweeping overreach” that would restrict technology “already available in mainstream gaming PCs and consumer hardware”.
The third phase of the CICF, also known as the “Big Fund”, was launched in May last year, representing the country’s largest-ever chip investment fund. Its 19 equity investors were led by China’s Ministry of Finance, state-owned China Development Bank Capital and state-asset manager Shanghai Guosheng Group.
