Goldman evaluating role in China’s Megvii IPO after US blacklist

Goldman Sachs said on Tuesday it was reviewing its involvement in Megvii Technology’s planned initial public offering (IPO) after the U.S. government placed the Chinese artificial intelligence firm on a human rights blacklist. In an emailed statement in response to a request for comment on the Alibaba-backed Megvii IPO, Goldman said it was “evaluating in light of the recent developments.” Goldman is a joint sponsor of the Megvii IPO, alongside Citigroup and JPMorgan Chase, which both declined to


Goldman Sachs said on Tuesday it was reviewing its involvement in Megvii Technology’s planned initial public offering (IPO) after the U.S. government placed the Chinese artificial intelligence firm on a human rights blacklist. In an emailed statement in response to a request for comment on the Alibaba-backed Megvii IPO, Goldman said it was “evaluating in light of the recent developments.” Goldman is a joint sponsor of the Megvii IPO, alongside Citigroup and JPMorgan Chase, which both declined to
Goldman evaluating role in China’s Megvii IPO after US blacklist Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-09
Keywords: news, cnbc, companies, chinese, firm, goldman, intelligence, evaluating, chinas, recognition, blacklist, shanghai, facial, megvii, ipo, role, public, companies


Goldman evaluating role in China's Megvii IPO after US blacklist

An attendee uses his smartphone to record a facial-recognition demonstration on himself at the Beijing Megvii booth at the MWC Shanghai exhibition in Shanghai, China, on June 27, 2019.

Goldman Sachs said on Tuesday it was reviewing its involvement in Megvii Technology’s planned initial public offering (IPO) after the U.S. government placed the Chinese artificial intelligence firm on a human rights blacklist.

The Trump administration said on Monday that Megvii and seven other Chinese companies were targeted because they were implicated in Beijing’s repression of Muslim minority populations in the Xinjiang Uighur Autonomous Region in the far west of the country.

In an emailed statement in response to a request for comment on the Alibaba-backed Megvii IPO, Goldman said it was “evaluating in light of the recent developments.” Sources had previously told Reuters the listing was scheduled for Hong Kong in the fourth quarter and might raise as much as $1 billion.

Risk consultants and Silicon Valley lawyers said that other U.S. companies involved with the blacklisted Chinese firms, whether as investors or as underwriters, are also likely to reevaluate their relationships.

Goldman is a joint sponsor of the Megvii IPO, alongside Citigroup and JPMorgan Chase, which both declined to comment.

Goldman had thoroughly evaluated the Megvii deal before initially signing onto it using its usual due diligence process, a person familiar with the matter said.

Known in the artificial intelligence business for its facial recognition platform Face++, Megvii will become the first Chinese AI firm to go public if the deal goes ahead. The company provides facial recognition and other AI technology to governments and companies including Alibaba, Ant Financial, Lenovo Group and Huawei.


Company: cnbc, Activity: cnbc, Date: 2019-10-09
Keywords: news, cnbc, companies, chinese, firm, goldman, intelligence, evaluating, chinas, recognition, blacklist, shanghai, facial, megvii, ipo, role, public, companies


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Trump’s blacklist derails Goldman’s plan to take a Chinese AI company public

President Donald Trump’s move to blacklist Chinese tech companies is threatening to derail what could be the first Chinese artificial intelligence firm to go public. Megvii Technology, a Chinese AI company known for its facial recognition platform, is among a slew of companies the White House blacklisted due to alleged human rights violations against Muslim minorities in China’s far-western region of Xinjiang. A spokesperson from Megvii said the company has no comment on Goldman’s statement. Reg


President Donald Trump’s move to blacklist Chinese tech companies is threatening to derail what could be the first Chinese artificial intelligence firm to go public. Megvii Technology, a Chinese AI company known for its facial recognition platform, is among a slew of companies the White House blacklisted due to alleged human rights violations against Muslim minorities in China’s far-western region of Xinjiang. A spokesperson from Megvii said the company has no comment on Goldman’s statement. Reg
Trump’s blacklist derails Goldman’s plan to take a Chinese AI company public Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-09  Authors: yun li
Keywords: news, cnbc, companies, derails, company, blacklist, china, chinese, public, technology, tech, plan, companies, spokesperson, megvii, goldmans, trumps


Trump's blacklist derails Goldman's plan to take a Chinese AI company public

An attendee uses his smartphone to record a facial-recognition demonstration on himself at the Beijing Megvii booth at the MWC Shanghai exhibition in Shanghai, China, on June 27, 2019.

President Donald Trump’s move to blacklist Chinese tech companies is threatening to derail what could be the first Chinese artificial intelligence firm to go public.

Megvii Technology, a Chinese AI company known for its facial recognition platform, is among a slew of companies the White House blacklisted due to alleged human rights violations against Muslim minorities in China’s far-western region of Xinjiang. Its planned initial public offering now might not see the light of day as Goldman Sachs, one of the IPO’s sponsors, said it’s rethinking its role due to the blacklist.

“We are evaluating in light of the recent developments,” regarding our involvement in the IPO, a spokesperson at Goldman told CNBC on Wednesday.

Megvii, backed by tech giant Alibaba, was scheduled to debut in the public markets in the fourth quarter and might raise as much as $1 billion, Reuters previously reported.

A spokesperson from Megvii said the company has no comment on Goldman’s statement.

Regarding Trump’s blacklist, Megvii said it “strongly objects to the company’s designation on the U.S. Commerce Department’s Entity List, for which there are no grounds.”

“We believe our inclusion on the list reflects a misunderstanding of our company and our technology, and we will be engaging with the U.S. government on this basis,” the spokesperson said. “Any direct business impact from this designation is expected to be minimal.”

The U.S. Department of Commerce on Monday barred eight companies, as well as 20 Chinese government entities, from doing business with American firms without being granted a U.S. government license. The Trump administration also put visa restrictions on Chinese officials “who are believed to be responsible for, or complicit in, the detention and abuse” of Muslim minority groups in Xinjiang.

The moves came just days before the U.S. and China resume their high-level trade talks in Washington this week. China on Tuesday said it “strongly urges” the U.S. to stay clear of the country’s domestic issues and remove the sanctions immediately. Asked whether China would retaliate for the blacklist, a Chinese Foreign Ministry spokesman said “stay tuned.”


Company: cnbc, Activity: cnbc, Date: 2019-10-09  Authors: yun li
Keywords: news, cnbc, companies, derails, company, blacklist, china, chinese, public, technology, tech, plan, companies, spokesperson, megvii, goldmans, trumps


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Alibaba-backed Chinese A.I. firm Megvii files for Hong Kong IPO

Qilai Shen | Bloomberg | Getty ImagesChinese artificial intelligence (AI) firm Megvii has filed for a public listing in Hong Kong. The company hit 1.42 billion yuan ($199.7 million) in revenue in 2018, an increase of more than 350%. In the first six months of this year alone, the company lost 5.2 billion yuan — more than the amount it lost throughout 2018. The company also highlighted a number of risks around the escalating U.S.-China trade war. “Any escalation in trade tensions or a trade war,


Qilai Shen | Bloomberg | Getty ImagesChinese artificial intelligence (AI) firm Megvii has filed for a public listing in Hong Kong. The company hit 1.42 billion yuan ($199.7 million) in revenue in 2018, an increase of more than 350%. In the first six months of this year alone, the company lost 5.2 billion yuan — more than the amount it lost throughout 2018. The company also highlighted a number of risks around the escalating U.S.-China trade war. “Any escalation in trade tensions or a trade war,
Alibaba-backed Chinese A.I. firm Megvii files for Hong Kong IPO Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-26  Authors: arjun kharpal
Keywords: news, cnbc, companies, kong, ai, china, war, trade, ipo, megvii, yuan, technology, alibababacked, firm, chinese, million, billion, report, files, huawei, hong


Alibaba-backed Chinese A.I. firm Megvii files for Hong Kong IPO

An attendee uses his smartphone to record a facial-recognition demonstration on himself at the Beijing Megvii Co. booth at the MWC Shanghai exhibition in Shanghai, China, on Thursday, June 27, 2019. Qilai Shen | Bloomberg | Getty Images

Chinese artificial intelligence (AI) firm Megvii has filed for a public listing in Hong Kong. The company is backed by e-commerce giant Alibaba and state-owned enterprises such as Bank of China Group Investment, the bank’s private equity arm. Megvii sells AI products from facial recognition technology to algorithms designed for traffic management. It has not released the pricing of its shares or the timeline of its initial public offering (IPO). But the firm has signaled confidence in the Hong Kong market despite the ongoing protests and a recent report that Alibaba has postponed its listing there. Earlier this year, Megvii completed a $750 million funding round, reportedly putting its valuation north of $4 billion. Its closest rival, Sensetime, has a valuation at over $4.5 billion.

Widening losses

Facial recognition is a key part of China’s drive to become a world leader in AI technology by 2030, and both companies are benefitting from that as the technology has been deployed in cities across China. The Chinese government is one of its key customers.

This has helped Megvii see fast revenue growth. The company hit 1.42 billion yuan ($199.7 million) in revenue in 2018, an increase of more than 350%. In the first six months of 2019, Megvii raked in 948.9 million yuan. However, losses have continued to widen. Megvii made a loss of 3.35 billion yuan in 2018, compared to 758.8 million in 2017. In the first six months of this year alone, the company lost 5.2 billion yuan — more than the amount it lost throughout 2018. Megvii attributed this to continued investment in research and development.

Trade war risks

Megvii outlined a number of risks for its business, from ballooning research and development costs to negative publicity relating to facial recognition technology. For example, a recent report from Human Rights Watch linked Megvii to China’s mass surveillance of the minority Uighur population in Xinjiang. The report was later corrected to show Megvii was not involved. “Although the allegations made by the report in relation to our involvement with the misuse of our technologies were proven to be wrong … such report had still caused significant damages to our reputation which are difficult to completely mitigate,” Megvii’s prospectus said, without explicitly naming the Human Rights Watch study. The company also highlighted a number of risks around the escalating U.S.-China trade war. In May, reports surfaced that Megvii could be one of a handful of Chinese surveillance firms that could be put on a U.S. blacklist which would restrict American firms from selling technology to them. While the U.S. government has not made an official announcement about this, Megvii said if it were to happen, the company’s ability “to develop and provide our solutions might be impaired.” However, the U.S. has blacklisted Chinese telecom equipment maker Huawei Technologies, which has some business ties with Megvii. Huawei is important for the supply chain to various industries such as telecommunications and consumer electronics., and a longer-term ban on Huawei will have knock-on effects for others such as Megvii. “Prolonged restrictions against Huawei could cause a turmoil to all such industries, which may in turn materially and adversely affect our business, financial condition and results of operations,” Megvii said. Over the weekend, China introduced new tariffs of between 5% and 10% on $75 billion of goods from the U.S. In response, President Donald Trump increased duties on imports from China. The intensifying trade war is a concern for Megvii. “Any escalation in trade tensions or a trade war, or the perception that such escalation or trade war could occur, may have tremendous negative impact on the economies of not merely the two countries concerned, but the global economy as a whole,” its IPO prospectus said. “In addition, if China were to increase the tariff on any of the items imported by our suppliers and contract manufacturers from the U.S., they might not be able to find substitutes with the same quality and price in China or from other countries, Megvii said. “As a result, our costs would increase and our business, financial condition and results of operations would be adversely affected.”


Company: cnbc, Activity: cnbc, Date: 2019-08-26  Authors: arjun kharpal
Keywords: news, cnbc, companies, kong, ai, china, war, trade, ipo, megvii, yuan, technology, alibababacked, firm, chinese, million, billion, report, files, huawei, hong


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post