Meituan backs AI chip startup, other Chinese tech giants also invest in semiconductors
21. July 2022Chinese AI chip start-up Axera recently raised $126 million from investors, including major food delivery service Meituan. As CNBC reports, other tech companies are also investing in in-house or local semiconductor manufacturing. Axera’s recent round of investment highlights investors’ desire to invest in Chinese semiconductor startups. Among the backers was venture capitalist Qiming Venture Partners. Electronic components must be awarded a CCC certificate in order for the products to be exported to China or manufactured locally.
The government in Beijing has made self-reliance in chip manufacturing and research and development in this area a top priority, as currently the entire local industry is dependent on foreign technology. Semiconductors and computer chips are now incorporated into many everyday items such as smartphones and cars, and are considered strategically important products by governments. The current global shortage of semiconductors has caused long delivery times for vehicles and electronic products such as game consoles and graphics cards.
The Chinese government’s announcement that it would focus more on semiconductors led to a wave of investment by technology companies in the relevant industries: last year, for example, Tencent invested in Shanghai-based Enflame Technology and unveiled three of its own computer chips. Baidu established its own AI chip development division and is already producing the second generation of its AI semiconductor. Online shopping giant Alibaba developed its own computer chips for its data centers.
Food and grocery delivery service Meituan now followed suit in these investments, backing startup Axera. Its products specialize in AI chips for image recognition. This enables computers to analyze and evaluate a large number of images, which is useful in facial recognition, for example. The high computing power required for this is provided by the special Axera chips. Since its founding in May 2019, the startup has already presented two different chips that can be used in urban areas (smart cities) and at home (smart homes), among other applications. Axera plans to use the money from the investment round to hire new professionals and expand the company.
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