According to people familiar with the situation, Xiaomi Corp. is one of the investors considering entering a funding round for Black Sesame Technologies Inc. worth at least 1.5 billion yuan ($231 million).
According to the people, the fundraising could value the Shanghai-based artificial intelligence and autonomous driving chipmaker at $1.5 billion. They asked not to be named because the matter is private. Tencent Holdings Ltd. was one of Black Sesame's supporters in its previous funding round, according to one of the sources.
According to the people, Black Sesame is considering an IPO on China's technology-focused Shanghai Star board as early as next year. According to them, at least one more round of investment is expected before any future IPO.
Xiaomi has poured billions of dollars into a slew of startups in order to expand its mobile and online ecosystem, but a partnership with Black Sesame will be the company's first foray into the automotive sector after unveiling a $10 billion initiative to develop electric vehicles. According to its website, the startup, which designs AI chips and systems for vehicles, has major auto industry clients such as Robert Bosch GmbH, SAIC Motor Corp., and BYD Co.
The size and value of the fundraising could adjust, according to the people, while IPO talks are still in the early stages and the company could decide not to seek a listing. Black Sesame, Tencent, and Xiaomi representatives declined to comment.
Xiaomi's billionaire co-founder Lei Jun revealed last month that the company expects to spend $10 billion in the production of electric vehicles over the next decade. The Chinese smartphone maker has joined the ranks of tech titans such as Apple Inc. and Huawei Technologies Co. in focusing on the automotive industry, betting that future vehicles will become more autonomous and linked. Xiaomi will outsource car assembly to contract manufacturers, a model it uses for its smartphones, a person familiar with the matter has said.
According to the website, Black Sesame is an artificial intelligence company that focuses on image processing, perception algorithms, and system-on-a-chip architecture. According to the website, it employs about 300 people, with 80 percent of them working in research and development.
The company is one of a rising number of Chinese chipmakers and tech behemoths looking for funding to build semiconductors for AI algorithm training. According to BNEF, Chinese artificial intelligence chip companies such as Horizon Robotics Inc. and Enflame raised $1.2 billion in the first quarter alone.
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