A visitor at the booth of CloudWalk at CES ASIA in Shanghai in June 2018 File photo: VCG

Cloudwalk Technology, known as one of China' four artificial intelligent (AI) "dragons", is set to become China's first AI unicorn to go public at home, a milestone for China's burgeoning AI industry amid heated technology race between the world's two largest economies, rising public concern about data security and US government' increasingly hostile attitude toward Chinese companies listing in the US. 

The Shanghai Stock Exchange has accepted the IPO application of Cloudwalk on Tuesday, after the Guangzhou-based AI upstart updated its financial data in early June. Should the review process proceed smoothly, the remaining steps prior to IPO involve price inquiry, IPO road show, price setting and official public debut, according to industry insiders. 

A spokesperson of the company refused to disclose more information on the IPO when contacted by the Global Times. 

Some analysts expect the IPO would raise the company's valuation to 5 billion yuan ($77.25 million). 

Cloudwalk filed a prospectus with the Shanghai stock exchange in December 2020, seeking to raise 3.75 billion yuan ($573.5 million) in an IPO on China's Nasdaq-style STAR market. According to the prospectus, the company's main businesses involve providing AI solutions for such industries as finance, governance, transportation and commercial as well as human-machine interactive system.

"The listing opens a new path for Chinese AI and other high-tech companies that own chunks of personal data of Chinese residents. Compared with listing in Nasdaq or other overseas capital markets, an IPO at home could be more efficient, while the risks of leaking critical data could be better managed," Wang Peng, associate professor at the Gaoling School of Artificial Intelligence at the Renmin University of China, told the Global Times on Wednesday. 

He added that listing at home market is also a safer choice for China's high-tech firms, as Washington's anti-China stance is also poisoning its capital market. 

China's cash-hungry AI upstarts are developing rapidly, and a timely IPO could help ease their finance crunch and focus more on making breakthroughs in bottleneck technologies, in particular the underlying algorithm, observers said. 

Washington has put Cloudwalk, along with other three Chinese AI "dragons," on a blacklist, prohibiting them from purchasing US supplies.

According to the prospectus, in 2020 Cloudwalk's business revenue reached 755 million yuan, yet it recorded a net loss of 720 million yuan, due to huge investment in research and development.

Another Chinese AI upstart, Megvii, backed by Alibaba, completed its first round of inquiry reply from the Shanghai STAR bourse in June, a spokesperson of the firm told the Global Times. The next steps for the firm are the same as other companies seeking IPO, the spokesperson said. 

And, SenseTime is reportedly exploring a dual listing in both Hong Kong and the Chinese mainland. Yitu terminated its IPO application on the STAR board on March 11.