One of China's largest private equity firms, China Science and Merchants Investment Management Group, is to invest in a UK-based artificial intelligence incubator, as AI technologies are in great demand in China and increasingly being applied to more fields.

The state-backed fund has signed a multimillion-pound cooperation agreement with British startup incubator Founders Factory. The two sides will jointly hire 60 people, invest in five early-stage AI startups and launch two new companies each year, according to a report in the Financial Times.

CSC says the investment is part of an expansion into overseas markets without disclosing further details.

"The UK has innovative AI technology, and China has a very big market and business model innovation. We want to fuse the technology we find in the UK with the Chinese market," says Dania Zhou, senior managing director of CSC Group, who has been in charge of the deal, was quoted as saying by the Financial Times.

Brent Hoberman, Founders Factory co-founder and executive chairman, says: "This deal is significant because it extends the reach of Founders Factory into one of the most coveted, yet hard to access markets on the planet, while proving that the UK is recognised globally as a center of excellence for AI.

"AI will impact all sectors built upon large data sets ranging from health and insurance, commerce and finance, even beauty and media, and we are uniquely positioned to leverage that trend and attract the brightest talent.

"By welcoming such a prestigious technology investor into Founders Factory, we continue to strengthen our offering to startups, partnering them with some of the world's leading brands in almost all global markets."

Chinese enterprises have stepped up their presence in overseas AI sectors through investment and M&As. In January, Beijing Kunlun Tech Co Ltd announced it plans to acquire a 20 percent stake in the US AI company Woobo Inc for $800,000.

Zhao Ziming, an analyst at internet consultancy Analysys, says, "Foreign AI companies or entrepreneurial projects have an irreplaceable advantage in technologies, while the good and the bad are intermingled in domestic AI startups, and the technical barriers are high, so the opportunity cost of investing domestic startups is relatively high."

Cai Xiao contributed to this story.

fanfeifei@chinadaily.com.cn

( China Daily European Weekly 10/14/2016 page28)