China’s ChatGPT-like company Xiao-i (小i机器人) went public on Nasdaq on March 9 and began trading under the ticker symbol AIXI.
Its stock started at US$6.8 per share, the same as the offering price, but quickly slid during the intraday trading to close 14.56% down at US$5.81.
Although Xiao-i’s shares fell below the IPO price on the first day of trading, they regained part of the losses on Friday, jumping 11.7% to US$6.49 apiece at the close of the trading, with a market cap of US$469 million.
Xiao-i issued 5.7 million American Depository Shares (ADS), planning to use the raise to finance its R&D, marketing and day-to-day operation.
The Shanghai-based firm is a developer of conversational AI technologies, specializing in NLP-enabled chatbot and cloud solutions and applying them in industries such as telecommunication, finance, urban public service, construction, the metaverse, manufacturing and smart healthcare.
Its primary business area is to empower smart city and building design through AI. The company claims to possess independent cognitive intelligence platforms which, combined with NLP, computer vision, machine learning and other technologies, can be deployed to sectors such as call center operation, finance and so on.
Xiao-i has come a long way since the early days of its inception, when it made a name for itself by suing Apple twice over what it called intellectual property rights infringement.
The then AI startup took Apple to court, accusing its voice assistant Siri of violating Xiao-i’s AI chatbot patents and demanded compensation of 10 billion yuan (US$1.45 billion).
Proceedings have dragged on for years, pending a court ruling.
The firm’s financials did grow significantly over the past three years since the coronavirus outbreak, which accelerated the adoption of digital communication tools to supplant face-to-face conversation.
Its revenue in 2020, 2021 and the first six months of 2022 ending June 30 was US$13.86 million, US$32.52 million and US$12.90 million, respectively.
Notably, Xiao-i returned to profit in 2021, recording a net profit of US$3.37 million, reversing a net loss of US$7.06 million the previous year, according to its prospectus.
Improved financials have bolstered Xiao-i executives’ confidence in setting higher growth targets — even taking on bigger rivals.
During the ceremony marking the Nasdaq listing on Thursday, Yuan Hui, founder of Xiao-i, said the company’s goal is to create a Chinese-style variant of ChatGPT.
“Currently we have a self-developed cognitive intelligence platform with independent IP rights, and have achieved massive commercialization.”
Nonetheless, observers point out that the firm faces myriad challenges in its quest to develop ChatGPT-like innovations.
In addition to the high costs of training a bid language model upfront and follow-up operation, Xiao-i also is competing head to head with iFlytek, Alibaba and Baidu — all of them titans in NLP and speech/voice recognition.
According to a research report on Chinese AI smart software and application in H1 2022, iFlytek, AliCloud and Baidu Cloud represented a combined 25.6% of the market, leaving Xiao-i, a much smaller rival, struggling to play catch-up.
