A large number of technology firms are listed in the United States but with the announcement of a Nasdaq-style board and increased demand for public data, the trend may change to a more domestic setup, an analyst suggested.
Credit Suisse Head of China Equity Strategy, Vincent Chan, told CNBC at a conference in Hong Kong that while most Chinese tech firms working on artificial intelligence (AI) are listed in the U.S., revenue from working with Beijing's public surveillance initiative could entice these companies to list locally.
"It's also favorable for a company to have a domestic listing. It's not just about attracting capital, but selling your brand and showing the local people that you are not just earning their money, but you also share your wealth. These are very important considerations," he pointed out.
Chan said it is common in China to have CCTV cameras installed over the place. The scheme is part of the Chinese government's plan of keeping the country secure from potential external threats and widespread crimes. The demand for data collected from public surveillance has been growing over the past years.
During the conference, Chan explained that many AI firms in China could open the gateway for a rising business sector that sees growth by helping the government achieve its goal of keeping peace across the country.
While most of China's "unicorn" startups fall under the consumer goods sector, innovation-centered companies are starting to change the game. Analysts believe a new race of innovative firms working on robotics and AI could rule the upcoming Nasdaq-inspired "technology innovation board" that the Shanghai Stock Exchange will implement soon.
The stock index is expected to see a huge wave of formerly U.S.-listed firms considering dual listings as the government offers more public security projects for AI providers.
Meanwhile, a new report, the China Artificial Intelligence (AI) in Manufacturing Industry Databook Series (2016-2025), predicted that AI in the country's manufacturing industry will expand to reach an estimated $1,798.5 million by 2025.
The segments included in the study are Natural Language Processing (NLP), Machine Vision & Hearing, Machine Learning and Deep Learning, and Robotics and Expert Systems. The study offers industry enthusiasts and potential investors with information on how AI will help the sector growth through services, hardware, platforms, and applications.
In 2018, AI in the manufacturing sector saw growth of 58 percent, accounting for $290.7 million in profits. With artificial intelligence rising in the ranks of segments that provide easier processes for various industries, it is expected that more AI companies will be born this year and beyond.
