Vietnam’s Vingroup intends to sell stakes in its AI firms to global tech giants including Nvidia: sources

[HO CHI MINH CITY] Vingroup, the largest private conglomerate in Vietnam, is in the process of selling its stakes in two artificial intelligence(AI) -focused firms, VinBrain and VinAI.

This is according to three sources with knowledge of the matter, who shared the information with The Business Times on condition of anonymity.

US AI chipmaker Nvidia is said to be urging related parties to finalise its acquisition of VinBrain, a Hanoi-based company that specialises in AI-powered healthcare solutions, said one source who is involved in the negotiations.

BT also understands that Nvidia had considered acquiring either VinBrain or VinAI previously.

As at June this year, Vingroup held 49.74 per cent and 65 per cent of equity interest in VinBrain and VinAI, respectively, according to Vingroup’s latest financial statement released in August.

VinBrain is an associate company in which Vingroup had invested 126.6 billion dong (S$6.6 million) as at December 2023. VinAI was established as Vingroup’s research institute and then became a subsidiary company in 2021 with capital of 425 billion dong.

Nvidia is also making arrangements for a possible visit by its founder and chief executive Jensen Huang to Vietnam in November, said two other sources who are involved in the planning of this trip.

“(The deal with VinBrain) could be one of the highlights of his trip,” said one source, adding that Huang intends to visit Vietnam more regularly in the coming years.

When contacted by BT, both Vingroup and Nvidia declined to comment.

VinBrain’s flagship product is a software called DrAid, which supports radiologists in diagnosing diseases detected through chest X-rays of patients in South-east Asia and the US. The data is used to train AI models.

Last year, VinBrain formed partnerships with Stanford University and Microsoft to train and cross-validate AI models to increase the accuracy of diagnostic imaging for patients.

Also in 2023, VinBrain became a member of Nvidia Inception, a global programme designed to support AI startups with access to accelerated computing resources, to improve healthcare and precision medicine in collaboration with the US giant.

Since Huang’s first visit to Vietnam last December, Nvidia has announced deals and partnerships with various companies in the South-east Asian country.

They include a deal to build a US$200 million AI factory with Hanoi-based tech firm FPT, and making Vietnamese gaming and messaging unicorn VNG its cloud partner.

In April this year, some senior executives from Nvidia led a delegation to Hanoi, Ho Chi Minh City and Danang to explore investment opportunities in the semiconductor industry.

These have taken place in the context of the deepening ties between Vietnam and the US, which elevated their bilateral relationship to a comprehensive strategic partnership last September.

To date, Nvidia’s largest deal in the region is in Malaysia – a RM20 billion (S$6.08 billion) investment in collaboration with a local conglomerate to develop AI infrastructure there.

AI research arm also up for sale

A separate global tech giant is believed to be conducting the due diligence process to acquire Vingroup’s AI research arm, VinAI.

In April, executives from VinAI met with Keith Strier, vice-president of Worldwide AI Initiatives at Nvidia, in Hanoi to explore collaboration opportunities in the technology sector.

Since last year, VinAI has also been working with US chipmaker Qualcomm to launch various AI solutions dedicated to smart cities and smart mobility.

In 2022, VinAI was recognised as one of the top 20 global companies leading the way in AI research by Thundermark Capital, a US venture capital firm and a member of the Nvidia VC Alliance.

VinAI was the only Vietnamese representative on the list, alongside the likes of Google, Alibaba, Apple, and OpenAI.

Last year, VinAI introduced PhoGPT – an open-sourced AI generative model series named after Vietnam’s traditional noodle dish and pre-trained for the Vietnamese language.

VinAI has also developed several products in collaboration with VinFast, its sister company that produces electric vehicles (EVs). The duo introduced MirrorSense, an AI-driven automatic mirror adjustment technology that recently won an innovation award at the consumer electronics show in Las Vegas in January.

Sharper focus on VinFast

If Vingroup eventually divests both VinAI and VinBrain, the only other AI-focused firm in which it still holds a majority stake (69.2 per cent) is VinBigData, which was established in 2021 with capital of 471 billion dong.

VinBigData develops products in the fields of data science and AI such as the smart voice assistant Vivi, which is integrated into EVs made by VinFast.

“Vingroup has gradually reduced its interest in technology firms in recent years and focused mainly on VinFast,” said another source with knowledge of the matter.

On Nasdaq, VinFast’s share price has dropped by more than 95 per cent since its peak last August when the EV maker’s market capitalisation exceeded that of legacy US carmakers Ford and GM.

VinFast’s market capitalisation is currently at about US$8.8 billion. Vingroup is valued at about 164.6 trillion dong on the Ho Chi Minh City Stock Exchange.

In 2018, Vingroup announced a strategy to “put Vietnam on the global map of technology and industry”.

This plan to transform Vingroup into Vietnam’s standard-bearer of industry was kicked off by its venture into the high-stakes business of car manufacturing in 2017 and followed by its shift to focus solely on EV production in 2022.

Vingroup also set up and made investments into various technology businesses such as VinBrain, research arms VinAI and VinBigData, battery maker VinES, and cybersecurity company VinCSS.