Fintech firm Ant Group is selling its $100 million stake in A&T Capital as the Chinese firm ditches crypto to focus on AI.
Apart from the increasing interest in AI from across the globe that might have excited Ant Group, its move also comes at a time when the crypto market has been experiencing volatility.
What next?
According to a Protos report, it still remains unclear what A&T Capital will do next, like shut down or hunt for new investors, following the departure of its major investor, Ant Group. Investors have also adopted a wait-and-see attitude.
Founded in April 2021, A&T Capital has invested in several crypto firms like Matrixport and ConsenSys.
Several months ago, the firm suffered some setbacks when its founding partner, Yu Jun, resigned following investigations into his workplace conduct.
The latest developments now come amid dwindling capital in crypto. According to Bloomberg reports, the VC capital fund fell, hitting a record low for crypto in June, when it went down by 23% from May to just $520 million raised in 84 funding rounds.
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Shift in focus
According to a Protos report, the Ant Group has decided to shift its attention to AI. AI, particularly generative AI, has increased interest among businesses and been growing this year following the launch of ChatGPT by OpenAI last November to immediate success.
Ant Group reportedly made its way into China’s AI market about a fortnight ago. It announced its entry by unveiling a finance-focused AI model. The group’s entry into the financial AI space comes following announcements by Chinese tech firms like Tencent and Xiaomi, which have expressed interest in the AI technology.
Jack Ma-backed Fintech is one of the largest financial service firms globally. Its affiliate, Alibaba, has already made inroads in generative AI and announced a week ago that it would open its AI model, Tongyi Qianwen, to the public, a sign the company got regulatory approval to “mass-market the model,” according to Reuters.
Regulatory relief
According to Protos, Ant Group’s most recent quarterly earnings showed profits rose by 17.4%, and this signals a relief after two years of Beijing’s crackdowns, which exerted pressure on the fintech group.
In July, the company was fined 7.12 billion yuan, or $985 million, for breaching a number of regulations around consumer protection, corporate governance, and money laundering.
As the AI race continues, Beijing has also increased support for companies developing AI as the technology becomes a focus of competition with the US.
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