VW invests $180 million in Google-backed Chinese AI startup

Mobvoi Inc., the Chinese artificial intelligence startup backed by Google, is getting a $180 million investment from Volkswagen AG to join a race to build the technology into cars.

The startup, founded in 2012 by a group of former Googlers, will develop products for Volkswagen models and possibly other brands based on its voice-recognition and natural language processing technology. That includes a smart rear view mirror that provides navigation, messaging and information through voice input, the company said in a statement.

Chinese tech giants are pushing into technologies that have the potential to transform the auto industry. Last month, Alibaba Group Holding Ltd. led an investment in WayRay, which makes holographic displays for cars. It’s also invested in Banma Technologies, a startup working with China’s SAIC Motor to develop internet systems for cars. And WeChat operator Tencent Holdings Ltd. has taken a 5 percent stake in Tesla Inc.

Alphabet Inc.’s Google led Mobvoi’s last round of financing in 2015, valuing the company at $300 million. That marked Google’s first direct investment in China since pulling its search service out of the country in 2010 because of disagreements with the government. Mobvoi’s other investors include prominent venture capital firms Sequoia and ZhenFund. Last year, Mobvoi became an official partner to Google’s Android Wear software, meaning its voice-search services are embedded in the U.S. company’s operating system for wearable devices.

The startup has been making its own forays into the U.S.: it started selling its second-generation smartwatch device in the country last year. Mobvoi’s Ticwatch became a hit in China with its voice-activated search and features such as a touch-sensitive strip for scrolling. Founder and Chief Executive Officer Li Zhifei has said the company may consider a U.S. stock market listing if sales in the country match its success at home.