ALIBABA-BACKED CHINESE AI FIRM MEGVII FILES FOR HONG KONG IPO. Megvii seeks the filing of an IPO for an IPO in Shanghai. The IPO could raise as little as $922 million. Megvii has filed in the past for the IPO HK following its being banned (Bloomberg).
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ALIBABA-BACKED CHINESE AI FIRM MEGVII FILES FOR HONG KONG IPO
Hong Kong (CNN Business). A huge Chinese artificial intelligence firm has filed an application for An Initial Public Offering in Hong Kong.
Megvii Technology was last valued at $4 billion at the time of the last round of funding that took place in May.
The company’s proposal to list is coming at a time when the market of the city is facing an intensifying trade war between China and the US and the large-scale protests across the town. Chinese tech giant Alibaba has recently decided to postpone its massive IPO within the city, as per Reuters. The report quoted two sources with knowledge of the issue.
Megvii is an initial Chinese AI stock trader on the Hong Kong Stock Exchange if it were listed.
Ant Financial — the Alibaba affiliate which Jack Ma founded — is the largest shareholder of Megvii by way of a subsidiary, according to a draft prospectus for Megvii which was published after midnight, on Sunday.
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Alibaba Group holds 14% more than the Chinese AI-focused startup through its company subsidiary Taobao China.
Megvii’s co-founders hold 16.8 percent each. They also have majority voting rights through a dual-class share structure. These shares have more the right to vote than normal shareholders.
Megvii was founded in the year 2011 and is a service provider to Chinese tech giants such as Alibaba, Huawei, and Lenovo. It also provides services to major government entities such as the Ministry of Public Security.
Face++ is a facial recognition software used to perform authenticate online identities. It has been a source of debate in the past.
Human Rights Watch published a report this month linking the organization to a mass surveillance system used by Chinese police to track people who reside in the western region of Xinjiang. The system is also referred to under the term Integrated Joint Operations Platform (or IJOP).
This report has since been rectified by the rights group who stated they believed that they had found that the Face++ Code discovered in the surveillance application’s login function was not functioning. Megvii denied any connection to an IJOP report, HRW stated.
CNN Business asked Megvii to clarify the matter. He supplied CNN Business with a statement from Yin Qi, co-founder, and CEO of the company. Megvii expressed gratitude to him for the correction and added that he was determined to make ethical use of AI technology.
The company also cited the allegations as a factor that could be a cause of concern but did not mention Human Rights Watch. Even though the claims were retracted and proven to be incorrect The company stated that they were still suffering reputational damage that is difficult to restore.
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Megvii has acknowledged in its IPO application that the trade war between China and the United States can cause more damage to the company.
Both countries have introduced new tariffs on each other in the last few days. It warned that an additional increase could lead to Megvii losing its supply with America.
It was said that Washington’s worldwide opposition to Huawei – which Megvii oversees is likely to have an indirect effect on the company’s business.