Shanghai Plans Capital Raising Worth $15 Billion

Shanghai has announced its intention to initiate investment funds with a minimum valuation of $15 billion or 100 billion yuan over the next couple of years. This huge capital raising is intended for AI products and services.

According to Chen Mingbo—who leads the Shanghai Commission of Economy and IT—the municipal management is currently occupied with strategic planning to determine capital raising and is searching for highly-qualified individuals for asset management.

Mingbo believes that even if the capital raising process manages to raise 100 billion yuan, then it is not good enough, in accordance with the required AI adoption. He stated that is it necessary to utilize public resources properly so collaboration for AI-related businesses can be empowered.

Over the recent years, Shanghai’s role for the Chinese economy has decreased gradually. As a result, the local government envisions its return to top form via capital raising in the IT and finance sectors.

Local leadership has proposed that Shanghai must create its own internet ecosystem—something that can complete with the BAT organizations. These reputed organizations include Baidu, Ali Baba Group Holding, and Tencent Holdings.

Today, AI empowers a huge list of industries and applications; from self-driving cars to the generation of predictions in financial markets; from analyzing a diseases’ outbreak in the healthcare industry to improve the level of security for the general public, the AI juggernaut has transformed the entire world. Hence, it comes as no surprise that the technology was identified by the Shanghai government as a powerful means to develop the city into a next-generation powerhouse and attain its lost glory.

So far, Chen has not explained how the city expects to succeed in capital raising of such enormous amounts. However, some experts believe that the government may offer some seed capital and then assist in encouraging famed private equity fund representatives and venture capitalists for capital raising.

Cao Hua, from Unity Asset Management, stated the presence of three fundamental components that can quicken the transformation of Shanghai in a world-class innovation centre: policy incentives, talent, and capital raising. However, Cao explained that competition is tough for Shanghai; other cities in the country are also trying their level best to tempt investments from startups and major IT organizations in their own ambitions to gain an upper edge in the Chinese economy.