CloudWalk joins $421M funding round for chipmaker amid potential AI pivot
China-based facial recognition software firm CloudWalk has joined a 3-billion-yuan (US$421 million) series D round for ESWIN Computer, also based in China, which makes Internet of Things chips.
CloudWalk, which has been sanctioned by the United States since 2020, has been selling facial recognition software since 2015. The U.S. and other developed economies are punishing CloudWalk for its part in supplying software to Beijing for the oppression of its Muslim Uyghur minority. The firm’s algorithms continue to show high accuracy in NIST FRVT evaluations.
ESWIN, which was founded in 2016 and is based in Beijing, is focused on integrated chips, display and video products, AI processing and wireless communication.
The company says it will use the new funding for research and development into chips known as RISC-V, according to a report by Deal Street Asia.
RISC-V is an open-source chip design standard, a contrast to the proprietary blueprints of manufacturers such as ARM or Intel.
The round was co-led by two Chinese state-owned investment groups: Beijing Financial Street Capital Operation Group and Guoxin Venture Capital.
Other investors in the round included E-town Capital, GF Qianhe Investment, China Jianyin Investment, Guangzhou Industrial Investment and Capital Operation Holding Group, China Integrated Circuit Industry Investment Fund II and Ceyuan Ventures.
CloudWalk may be moving away from its facial recognition-focused business.
The company also launched a large AI model in May, GamingDeputy reports. According to a report by Chinese state-owned Yicai Global the model is targeted at specific industries, including finance, gambling and transport.
The news follows, and may be motivated by, a disappointing fiscal 2022. CloudWalk reported revenue of 526 million yuan ($76 million) last year, a 51 percent overall decline, as well as a net loss of 869 million yuan ($121 million). Revenue from AI dropped by 87 percent to CNY2.85 million ($412,000).
The company blamed falling revenue on “slower macroeconomic growth, intensified market competition.”