Alibaba Entrepreneurs Fund's new US$150 million fund eyes startups with tested AI applications

Alibaba Entrepreneurs Fund has launched a new fund involving US$150 million (HK$1.17 billion) to support artificial intelligence applications that are able to retain clients, as Chinese tech firms are racing to commercialise the money-hungry technology.

The fund, named AEF NextGen Fund, will target AI solutions for three major sectors, including financial services, consumer retail, healthcare, plus construction and properties, and arts & entertainment. The founder Alibaba (9988) already has businesses in four of those sectors.

The startups worldwide are expected to have their products and create user cases, said Cindy Chow Lok Mei-ki, chief executive of AEF.

Partner of NextGen Partners Kenny Ho, who is also Alibaba’s investment veteran, said the fund can’t limit itself within Hong Kong or any certain regions despite the the potential escalation of Sino-US tensions under the US President-elect Donald Trump’s administration.

Ho also revealed that the target number is not decided but each startup put into the portfolio would receive about high single-digit million in US dollar.

It is the third fund of AEF since the launch in 2015.

Meanwhile, Chow said AEF expects to work more closely with the Hong Kong government, for example sourcing global investment targets as external fund managers, to help improve the tech ecosystem in the city.