China chip firm Horizon Robotics eyes moving US IPO to Hong Kong

Hong Kong

CHINESE artificial intelligence (AI) chip startup Horizon Robotics is considering shifting its potential US initial public offering (IPO) to Hong Kong in the wake of Beijing's increasing scrutiny of overseas listings, said people familiar with the matter.

The Intel-backed company is working with advisers to look into a possible Hong Kong float as soon as next year, the sources said. Horizon had been weighing a US listing that could raise as much as US$1 billion, people familiar with the matter said in June. The plans are preliminary and no final decisions on a venue switch have been made, they added. A representative for Horizon Robotics declined to comment.

The flow of Chinese companies going public in the US ground to an abrupt halt after ride-hailing giant Didi Global was slapped with a regulatory probe and banned from adding new customers just days after its IPO. Beijing has since proposed tightening rules for firms listing overseas as well as requiring a cybersecurity review for firms with data on more than one million users.

Beijing-based Horizon is part of a burgeoning market for developers of advanced automotive technologies such as self-driving, as China looks to become a world leader in AI chips and software in general. Tensions with the US have also fuelled a push to develop crucial technologies domestically.

Horizon Robotics, backed by investors including Hillhouse Capital and Jack Ma's Yunfeng Capital, is not the only company to change its fundraising plans in the wake of China's regulatory crackdown. AI-driving startup Pony.ai put its US listing plans on hold in the summer and turned towards rising funds privately, Bloomberg News reported.

Chinese audio startup Ximalaya is the first company since Didi to have formally moved its IPO from the US to Hong Kong, as it submitted listing documents last month. In addition to the increased scrutiny from Beijing, Chinese companies also face a tougher stance from US regulators who have paused approvals of IPOs by mainland firms until they address issues with their disclosures around the risks of investing in Chinese companies.

Founded in 2015, Horizon Robotics makes AI chips for autonomous vehicles and machines. It also makes software customised to these chips, which can be installed in everything from vehicles to smart speakers. BLOOMBERG