Chinese AI startup Moonshot has changed its corporate structure and brought in several state-backed investors to convince the government to support its listing in Hong Kong, according to the Financial Times.
The paper reported on 8 August that the Beijing-based AI lab may need to unwind the offshore entity it uses to raise funds internationally before it is allowed to list, as the government tightens its restrictions on overseas control of strategic assets.
The company, which released a model in July that rivals the leading models by Western competitors OpenAI and Anthropic, is seeking an initial public offering (IPO) to fund its next phase of model development and expansion, the FT reported.
Two people familiar with the matter told the paper that the IPO was unlikely to take place until next year, though another person said that it could be sooner if its regulatory issues were solved.
According to corporate disclosures, the company altered the structure of its China-based entity earlier in August, moving from a limited liability company to a joint stock company. These have more formal governance requirements, the FT said, and often include a wider shareholder base that makes transferring shares simpler.
Beijing is currently working to protect its frontier AI models and the chips used to run them from foreign interference and earlier this year issued a notification that certain companies in this space would be ineligible for offshore listings if they had overseas entities.
Moonshot AI is one of the companies that was forced to suspend its IPO preparations in the wake of this, but it is working with a team of bankers and lawyers to resolve the issues with its overseas investor base, multiple people familiar with the matter told the FT.
Earlier this week, the company told investors that it was in the process of unwinding its overseas entity and was still deciding how to transfer investors’ offshore stakes to an onshore one, an investor told the paper.
Chinese AI companies that have not cooperated with the government have found themselves facing its ire in recent months. Manus, an AI startup operating out of Singapore but founded in China, was ordered in April to unwind a $2 billion acquisition by Meta following an investigation which saw its chief executive and chief scientist barred from leaving the country.
