The landscape of Chinese artificial intelligence is shifting from pure software development to a tangible integration with the physical world. This transition was underscored on May 25 when Miao Exhibition, a Shenzhen-listed provider of overseas trade shows, announced a 150 million RMB (approximately $21 million) investment in StepFun. While the investment represents a minority stake, it signals the intense capital interest surrounding StepFun as it nears a pivotal $2.5 billion funding round.
Founded in April 2023 by former Microsoft Vice President Jiang Daxin, StepFun has rapidly ascended into the ranks of China’s ‘AI Little Dragons’—the second generation of AI pioneers succeeding the vision-focused giants like SenseTime. Unlike its predecessors, StepFun’s strategy is rooted in the concept of ‘Physical AI.’ The company’s Step series of large language models is designed not just for digital chatbots, but to act as the cognitive engine for automobiles, smartphones, and robotics.
The investment roster for StepFun reveals a deliberate alliance between silicon and software. Rather than relying solely on venture capital, the company has attracted ‘industrial capital’ from heavyweights in the consumer electronics supply chain, including ZTE, Longcheer, and OmniVision. This synergy suggests a future where AI is natively embedded in hardware, fulfilling the industry's growing mandate that artificial intelligence must understand and act upon the physical world to remain commercially viable.
Hong Kong has emerged as the primary theater for this capital evolution. With StepFun reportedly eyeing an IPO in late 2026 at a valuation of $10 billion, it follows in the footsteps of Zhipu and MiniMax, which have already utilized the Hong Kong Stock Exchange to secure liquidity. The presence of the Hong Kong Investment Corporation (HKIC) on StepFun’s shareholder list further validates the city’s role as a strategic gateway for Chinese tech firms seeking to bypass the complexities of US-listed alternatives.