(Yicai) Dec. 31 -- Shanghai has formed two funds, each with an initial CNY1 billion (USD140.8 million), to invest in embodied intelligence and large language models with the aim of bolstering the city’s position as a global leader in artificial intelligence and other cutting-edge industries.

The cornerstone investors in the Shanghai Embodied Intelligence Fund, jointly established by Shanghai State-Owned Capital Investment and Pudong New Area, are Shanghai State-Owned Assets Mother Fund, Zhangjiang Group, and Pudong Venture Capital, the authorities said yesterday. It will invest in related supply chains, including robotics, core components, autonomous driving applications, sensor technology, general robotics, and other areas.

The Shanghai LLM Fund, set up by Capital Investment and Shanghai State-Owned Investment Fund as the cornerstone investor, will focus on foundational and vertical industry models. It aims to serve the city's LLM industry development and technological innovation, help it turn into a globally influential AI innovation source, and develop a leading AI industrial cluster.

These two new funds and Yuanchuang Future Fund, previously launched by Capital Investment and Lingang Group, have total financing of nearly CNY3 billion, said Fei Fei, general manager of Fortera Capital, a private equity firm under Capital Investment. 

The three are expected to invest in 20 new projects next year, Fei said. They will form an AI ecosystem fund encompassing foundational models, vertical applications, AI edge computing, the metaverse, and embodied intelligence, providing enough capital and industry support for the entire AI sector, Fei added.

In addition, the management company of the Shanghai Three Leading Industries Mother Funds, funds of funds that support the city's core chip, biopharmaceutical, and AI industries, inked deals with the first group of a dozen ecosystem partner funds yesterday. The 12 have pledged funding of CNY6.7 billion, aggregate funding of CNY25 billion (USD3.4 billion), and a leverage ratio of 3.73.

Shanghai launched the three FOFs with CNY100 billion (USD13.7 billion) on July 26. They aim to invest in early-stage hard tech startups, foster industries, conduct mergers and acquisitions, and strengthen supply chains.

Editor: Martin Kadiev