(Yicai) July 28 -- Pudong New Area, a pilot free trade zone in Shanghai, has unveiled an artificial intelligence fund worth CNY2 billion (USD278 million) aimed at startups and focused on investing in cutting-edge AI innovation technologies.

The fund, initiated by Pudong Venture Capital Group, which is under the Pudong New Area government, has an initial phase of CNY500 million (USD69.9 million) earmarked for startups in the seed stage, according to an announcement at the Pudong New Area Global Promotion Conference for AI Industry Ecosystem held yesterday.

A seed-stage startup is a company that has completed initial development but has not yet achieved significant commercial success. Such firms mainly seek financing to verify business concepts, develop initial products or prototypes, conduct market research, or build teams.

The fund typically invests between CNY300,000 and CNY5 million (USD41,935 and USD698,910) in a single project, said Men Qingbing, general manager of Pudong Venture Capital. Deals have already been agreed for investing in 18 startups, Men added.

"The fund will adopt flexible investment methods, including equity investment, convertible bonds, and 'investment-first-then-equity' models based on the unique state of each startup and its founders, to support the rapid implementation of these innovative projects," Men noted.

"The seed fund mainly serves the transformation of AI research achievements," Men said. "So far, we have allied with R&D achievement commercialization centers of major universities, including those in Hong Kong. We hope these AI research outcomes will be transformed and implemented in Pudong through the fund's investments and attract outstanding AI talents to start businesses and innovate in the area."

Men pointed out that the fund should speed up the transformation and commercialization of innovative achievements in AI basic research in Pudong, turning it into a world-leading agglomeration of vertical AI model ecosystems.

Pudong is one of China's first AI innovation and application pilot zones, with its AI sector exceeding CNY160 billion (USD22.4 billion), accounting for about 40 percent of that of Shanghai, while its intelligent computing power makes up nearly half of the city's total. Over 200 vertical AI companies have established a presence in the area, with 28 of their models having completed filing or registration.

Editors: Tang Shihua, Martin Kadiev