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On December 28th, just before the end of 2023, a new billion-level financing has been added to the AI chip sector.

Shenzhen Kunyun Information Technology Co., Ltd., a leading company in the field of reconfigurable data flow AI chips, announced the completion of hundreds of millions of yuan in Series C financing. This round of financing was led by Pro Capital, with follow-on investments from Dinghui Baifu, China Unicom's affiliated United Creation Fund, Zhang Keyao Kun Fund, and Zhonglou Financial Control Group. The funds will mainly be used to support the research and development and large-scale deployment of the next-generation reconfigurable data flow CAISA AI chip, and to build an industrial ecosystem for CAISA chips across various vertical industries.

In 2023, the complex and variable global economic situation has brought tremendous pressure to the investment and financing market, with issues such as a decline in fundraising and investment, valuation adjustments, tightening of IPOs, and difficult exits becoming the focus of many investors and companies.

The financing situation in the AI track is much better compared to other tracks, but the total amount of financing has also shown a significant decline.

01

AI Financing明显退潮

In fact, the peak of the AI industry was in 2021.

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According to data from the China Business Industry Research Institute, from 2018 to 2021, the total investment in artificial intelligence showed an increasing trend, with the highest investment amount reaching 248.582 billion yuan in 2021. In 2022, there was a slight decline in the number of artificial intelligence investments and the amount invested, with the investment amount reaching 118.272 billion yuan and the number of investment events reaching 733.

As of November 24, 2023, there have been 531 artificial intelligence investment events in China, with an investment amount of 66.048 billion yuan. Among them, the number of related investment events in May, June, and July was at the forefront, with 62, 60, and 60 events respectively. From November 1st to November 24th, the number of investment events was relatively low, with currently 26 events. Among them, there were 5 strategic investments, and both Series B and Pre-A rounds had 4 events each.

According to the distribution of investment and financing rounds, as of November 24, 2023, the majority of artificial intelligence financing events in China are mainly in the early stages, with the angel round having the largest proportion, reaching 21.5%. Series A, strategic investments, Pre-A round, and Series B rounds account for 16.2%, 14.9%, 11.1%, and 7.7% respectively. The top five provinces and cities in China for the number of artificial intelligence investment and financing events are Beijing, Shanghai, Guangdong, Zhejiang, and Jiangsu, with 151, 101, 95, 64, and 61 events respectively.Looking at the actual historical financing data, the overall trend in the field of artificial intelligence shows a step-like decline in popularity.

Before and including 2021, AI technology companies moved towards maturity, with an increase in financing volume. Additionally, against the backdrop of domestication, companies at the foundational layer such as AI chips, data platforms, and operating systems received large-scale financing. After entering 2022, the track gradually became more segmented, and investors began to pay more attention to the application and commercialization of AI technology in specific fields. The most financing was obtained by the computer vision and imaging sectors in 2022, but the total amount of financing slightly declined in this year.

In 2023, the capital's investment attitude towards the AI industry became more cautious. Many factors contribute to this, such as some AI companies facing difficulties in the commercialization of technology, unclear profit models of some AI companies, leading to investors' concerns about investment returns, and reducing the willingness to invest, etc.

KPMG's audit partner in charge of China's technology, media, and telecommunications industry, Lu Kunpeng, stated that investment in China's AI field has gradually shifted from early stages like angel rounds to later stages like C rounds and D rounds. For example, the proportion of angel round investments has decreased from 36% in 2013 to 11% in 2022.

In terms of segmented investment fields, there is a trend divergence. Combining data from 2012 to October 2023, the growth rate of venture capital in four segmented fields - computing power, data platforms, natural language processing, and computer vision and imaging - has significantly accelerated, while venture capital in machine learning and deep learning fields has slowed down. In addition, in the "AI+ application field," there are more investment events in life services, smart healthcare, intelligent manufacturing, smart cars, and logistics warehousing, accounting for more than 75% of all AI investment events.

02

Focus of AI Market Financing

In AI chip financing, startups are favored

In 2023, the companies that received financing were generally startups in the AI chip sector.

Looking at the segmented direction, the AI fields that attracted more attention from venture capital in 2023, with more financing events and amounts, include: foundational layers such as AI chips, computing power, and sensing systems, which are indispensable infrastructure for AI platforms and applications.At present, AI chips are mainly categorized into GPGPU, FPGA, ASIC represented by VPU and TPU, and memory-computing integrated chips based on technological architecture.

In September 2023, Suyuan Technology, which focuses on cloud computing power products for artificial intelligence, announced the completion of a Series D financing round of 2 billion yuan. This financing round marks the seventh official round of funding for Suyuan Technology since its establishment over five years ago. Roughly estimated, Suyuan Technology has raised a total of more than 5.1 billion yuan to date. It is worth mentioning that Tencent has participated in almost every round of investment since the seed round of Suyuan.

In addition to Suyuan Technology, many other AI chip companies have received tens of millions or investments ranging from 100 million to 200 million yuan. Among the companies that received financing in 2023, more than 90% are startups established within the last 10 years, with nearly half of them founded in the last three to four years. AI chip companies established in 2018 completed the most financing deals in 2023. From the above data, it is evident that investment institutions still favor investing in high-growth potential startup AI chip companies.

AIGC/Large Models are poised for a breakthrough in 2023

In 2023, research in natural language processing achieved significant breakthroughs and entered the era of large models (LLM), a year also referred to as the "Year of Large Models." The rise of large models signifies that artificial intelligence technology has entered a new phase, with numerous tech giants, research institutions, and renowned universities engaging in fierce competition in this field, thus initiating the "Hundred Models War."

It can also be said that 2023 is a year when AIGC is poised for a breakthrough.

According to data from IT Orange, as of December 21, there have been a total of 158 investment events in the global AIGC field, with 118 domestic investment events, accounting for more than 70%. Compared to 43 investment events in 2022, the domestic AIGC financing environment in 2023 appears to be more active.

In terms of financing amounts, from January to November 2023, the cumulative financing total for China's AIGC industry was approximately 15.276 billion yuan. Among them, the higher domestic financing amounts for AIGC enterprises include ZhiPu AI and the aforementioned Suyuan Technology. According to the latest disclosure by the artificial intelligence large model startup ZhiPu AI, the company has obtained more than 2.5 billion yuan in financing in 2023, with investors including well-known institutions such as the social security fund, Alibaba, Tencent, and Hillhouse.

In the disclosed financing events, most are at the level of tens of millions and hundreds of millions of yuan. For example, in October last year, Baichuan Intelligence announced that it had completed a strategic round A1 financing, with a financing amount of 300 million USD, with tech giants such as Alibaba, Tencent, and Xiaomi, as well as several top investment institutions, participating in this round of financing. Including the 50 million USD from the angel round, Baichuan Intelligence's financing amount has reached 350 million USD.

In February 2023, Lanzhou Technology, a company in the language large model track, completed a Pre-A+ round of financing. This round of financing was led by Beijing Zhongguancun Science City Company, with continued investment from SD Capital and Innovation Works. To date, Lanzhou Technology has raised hundreds of millions of yuan in less than a year.Similar to AI chip investments, analyzing the investment rounds of AIGC, the financing rounds in the domestic AIGC industry are still in the early stages, with very few post-Series D financings.

In terms of investors, last year, companies in the AIGC field also attracted the attention and investment of many large enterprises and investment institutions, including Tencent, Alibaba, and Xiaomi. In addition, investment institutions such as Zhuoyuan Capital, Shunwei Capital, and Shenzhen Capital Group have also been quite active in the AIGC field.

03

The Robotics Track is not short of hot spots

As one of the representatives of innovative technology, the robotics track is also not short of hot spots.

When robots become the hardware carriers of generative AI, the robotics track begins to receive high attention from all parties. In the capital market, many tech giants such as Meituan, Baidu, and BYD have personally entered the field, extending olive branches to their favored robot startups, and supporting the accelerated development of enterprises through investment. At the same time, other players in the track are also increasing, with many executives stepping out from large factories to enter the robotics track and start their own robot companies.

For example, Zhiyuan Robotics, co-founded by Peng Zhihui (Zhi Hui Jun) and other technology professionals from several large technology companies. In December 2023, it completed the A3 round of financing, which may exceed 600 million yuan. This is already the fifth round of financing disclosed by Zhiyuan Robotics since its establishment in February. According to Tianyancha information, Zhiyuan had previously disclosed the completion of angel round financing in March 2023, A round and A1 round in April, and A2 round in August. With an average of one round of financing every two months, Zhiyuan is not only the most "efficient" startup, but also has gathered well-known institutions such as Hillhouse Ventures, Qiji Chuangtan, Baidu Ventures, Matrix Partners, and BYD in its investor team.

According to incomplete statistics from China Robotics Network, as of November 2023, there were about 131 financing events in the domestic robotics industry that year, with 44 financing events involving hundreds of millions of yuan, and the total financing amount was approximately between 11.1 and 12.5 billion yuan.

In the investment and financing market, industrial robots have become one of the most capital-intensive fields. Data from the Forward Industry Research Institute shows that in 2021, the number of investment and financing events in the industrial robot field reached 145, with a financing amount of 40.057 billion yuan; in 2022, the number of investment and financing events reached 134, with a financing amount of 14.467 billion yuan. In the first half of 2023, there have been dozens of industrial robot financing events in China, covering unmanned vehicles, drones, mobile robots, robotic arms, machine vision, multi-axis servo, and other fields. Among them, it is known that there are 7 companies with single financing of hundreds of millions of yuan, namely Jundao Robotics, Motong Transmission, Zhitong Technology, KeSi Intelligence, Turing Robotics, and United Aircraft.

However, there are more enterprises in the Chinese robotics industry that are in the Pre-A/A/A+ financing rounds, followed by those in the seed round/angel round.Machine Vision

The continuous advancement of deep learning-related technologies has significantly enhanced the capabilities of machine vision technology, accelerating its penetration into more industries. The overall investment scale in China's machine vision industry has also shown an upward trend.

Due to the vast industry chain and broad application fields of the machine vision industry, it is difficult to accurately count the investment and financing situation. According to data from IT Orange, as of March 14, 2023, the overall investment scale in China's machine vision industry has shown an upward trend. In 2021, the investment and financing activity in China's machine vision industry was at its peak, with a total of 95 investment and financing events occurring, amounting to 22.074 billion yuan. In 2022, the investment and financing activity in machine vision continued, with 80 investment and financing events taking place, totaling 13.722 billion yuan. As of March 14, 2023, there have been 9 investment and financing events related to the machine vision industry in 2023, with a total investment amount of 580 million yuan.

Looking at the distribution of investment and financing rounds, the financing rounds in China's machine vision industry are still in the early stages. Most of the industry financing is at or before the B+ round, accounting for about 85% of the total. Among them, the A round of financing has the highest number, with 121 A round financing events occurring from 2016 to 2023, accounting for about 24%. There are a total of 104 events in the seed and angel rounds, accounting for 20%. However, financing after the C round is relatively rare, mainly consisting of C round financing and strategic investments.

The continuous extension of application scenarios in the machine vision industry poses higher requirements and more targeted demands for industry technology. In the future, the machine vision industry will continue to enhance its performance in directions such as active vision, 3D vision, integration with 5G, deep learning, and embedded vision.