(Yicai Global) June 24 -- China’s securities regulator has approved the application from Cambricon Technologies, a star in the field of artificial intelligence chip, for an initial public offering on the Star Market, the Shanghai Stock Exchange’s science and technology innovation board. The company plans to raise CNY2.8 billion (USD395.7 million) for chip research and development.

The approval was announced by the Shanghai unit of the China Securities Regulatory Commission yesterday. According to its prospectus, Beijing-based Cambricon Technologies plans to use the money raised for next-generation cloud training chip and system projects, next-generation cloud reasoning chip and system projects, and next-generation edge-side AI chip and system projects, as well as to replenish working capital.

Cambricon Technologies mostly monetizes its AI chips in two business models. One is authorizing the processor’s intellectual property to chip firms. Among the examples is its cooperation with Huawei Technologies. The other is designing and selling chips. It has introduced cloud smart chips targeting clients like internet companies.

Cambricon Technologies achieved CNY11.6 million (USD1.6 million) in operating revenue in the first three months this year, an annual decline of 18.91 percent, mostly due to a relatively large fall in intelligent processor IP licensing business revenue from Huawei’s unit HiSilicon from a year earlier, the company said in public earlier. Its net loss amounted to CNY108 million over the three months, mostly on a great increase in R&D spending.

The firm is expected to earn between CNY600 million to CNY900 million in revenue from its main businesses this year, an annual gain of between 35.15 percent to 102.73 percent, with net profits attributable to the parent’s owner ranging between minus CNY400 million to minus CNY650 million.

Cambrian Technologies was a 10-person academic team formed in 2008 by the Institute of Computing of the Chinese Academy of Sciences to “explore the intersecting field between processor architecture and artificial intelligence”. The firm’s Chinese name, a geology period during which the Earth saw an explosion of life, is a metaphor for AI’s future.

Editor: Peter Thomas