China steps up investment in AI chips with funding for Hangzhou Nationalchip

A Chinese government-linked fund led investment into a local chip maker amid efforts by the country to tap an artificial intelligence boom.

A national guidance fund under the State Development & Investment Corp (SDIC) – which has the Ministry of Finance as a major stake holder – led the 150 million yuan (US$22.3 million) B round for Nationalchip, according to Sinovation Ventures, a venture capital firm founded by former Google China head Lee Kai-fu, who has written several books about AI.

Sinovation also participated in the funding round. The SDIC-linked fund could not be reached for comment as it did not have a website or listed phone number.

Founded in 2001, the Hangzhou-based company is a major chip maker for set-top boxes and has expanded into AI chips used for voice-command speakers and other ‘internet of things’ applications. The new funding will bankroll Nationalchip’s research on chips, software and algorithm designs, and speed up development of new products, according to a statement on Monday.

China is working to shake off its dependency on US$200 billion of annual chip imports. AI, dubbed by many as the fourth industrial revolution, has become a flashpoint in increasingly tense trade and technology relations between the US and China – the two biggest economies in the world. Programmable chips can be used in different applications of AI and are used to power a range of devices including face-scanning cameras and autonomous vehicles.