Artificial Intelligence (AI) has become a prime focus for venture capitalists over the last year. In light of this, the VMS Group, managing over $4 billion for Hong Kong’s wealthiest, has partnered with SenseTime executive Esther Wong to launch 3Cap AGI Fund, targeting early-stage AI investments, according to Bloomberg. Wong, founder and chief investment officer of 3Capital, is set to lead the fund.

“We are basically looking at very early-stage investments, tapping Wong’s AI knowledge and global network, said Elton Cheung, partner at Hong Kong-based VMS. “Of course, the risk is higher,” he continued, “but when AI startups get momentum from the market, the upside for valuation growth from the later rounds is also limited.”

The fund, with significant backing from local billionaires, reflects a surge in AI investments post-ChatGPT’s launch, as evidenced by over $21 billion in generative AI startups funding in 2023. VMS, running two diverse sector funds since 2006, plans a $300 million fund in 2024, focusing on health care and tech for China’s aging population and digital transition.

“We can now find the right company at a much lower valuation compared to the level years ago,” said Cheung. “We are bullish on the medium- to long-term outlook of China, and we think it’s the right time to look at it.”

Featured image: Credit: Esther Wong