Temasek backs OpenAI investor’s new $250-M tech fund

ALPHA Intelligence Capital (AIC), which invests in artificial intelligence (AI) companies including OpenAI, is raising a $250-million fund and has attracted government-owned entities of France and Singapore as backers.

AIC has garnered $160 million for the fund, its second, and is on track for a final close by September, partners Arnaud Barthelemy and Terry Chou said. France’s Bpifrance, Taiwan’s CDIB Capital Group, and a Singapore state-run fund are participating, they said.

The new AIC fund is already operational, and its early investments include ChatGPT creator OpenAI and computing architecture startup FlexAI. The Luxembourg-based fund is betting companies and consumers worldwide will continue to adopt AI at an accelerating clip, fueled by the popularity of services such as the chatbot ChatGPT.

Singapore’s state-owned Temasek Holdings Pte is among investors in the new fund, a person familiar with the deal said. AIC’s partners declined to confirm that name, and a Temasek representative declined to comment. AIC is in discussions with further two sovereign investors and a global backer to close the fund, the partners said.

AIC’s previous investments include Chinese AI developer SenseTime Group, Inc., a bet it has mostly exited. Its first fund also included AI startups that ended up being acquired by Apple, Inc., International Business Machines Corp. and BioNTech SE, said Ms. Chou, who is based in AIC’s Asia headquarters in Singapore.

Venture capital firms are raising billions of dollars across the globe to back technologies such as generative AI, which underpins chatbots like ChatGPT, Google’s Gemini and Microsoft Corp.’s Copilot. Such investors expect AI-powered tools to overhaul traditional ways of doing business and help solve technology challenges.

Still, the rising interest in AI sometimes leads to inflated valuations of startups with unclear monetization paths, said Mr. Barthelemy, also AIC’s chief operating officer.

“Our investors are convinced that AI will profoundly impact their respective businesses across all sectors and that this is just the beginning,” he said. “Our investors trust our expertise to help them navigate the AI hype.”

The fund will consider companies across the AI value chain, including hardware startups, Ms. Chou said. It’ll focus on companies that deploy AI for applications, cybersecurity and gaming, she said. The fund will invest globally, excluding China. — Bloomberg News