An Investor Putting American Money in China's AI Push --- Neil Shen has long bridged both countries, from working at Sequoia after Yale to his own firm

“Hong Kong -- In his two decades at Silicon Valley venture-capital titan Sequoia, Neil Shen made billions by identifying and investing in every major tech company to emerge in China.

 

Now, the Chinese billionaire is betting big on artificial intelligence, using American capital to fund Chinese firms competing in the global AI race.

 

U.S. rules bar U.S. investment via venture funds into Chinese companies developing certain advanced AI models. Shen has nonetheless been able to direct money into sophisticated AI startups in China, in part because he raised U.S. money before Washington introduced the limits.

 

Shen raised nearly $9 billion from U.S. pension funds and endowments, including Calpers and the University of California system before spinning out Sequoia China from its parent in 2023. He's since invested in Chinese companies developing large language models and others building robots and consumer apps using AI.

 

He has already picked winners. Shen's firm, now rebranded as HSG, was one of the early investors in Manus, an AI-powered tool for longer tasks such as writing research reports that Meta Platforms agreed to buy in December.

 

Hong Kong-based Shen first invested in 2024 when Manus was worth $85 million. A little over a year later, Manus sold for more than $2 billion. He also invested in the Chinese AI-model firms Moonshot AI, StepFun and MiniMax.

 

MiniMax has a companion app called Talkie that is popular in the U.S. and listed in Hong Kong in January. It is trading at more than fivefold its initial public offering price.

 

The 58-year-old has long bridged the U.S. and China markets. He went to high school in Shanghai and studied mathematics at the city's Jiao Tong University, before entering a math Ph.D. program at New York's Columbia University.

 

He soon switched to management at Yale, however, after questioning whether he would make a mark as a mathematician. According to people who have worked with him, he still retains a superhuman grasp of numbers, and often recalls minute details from deals that others have long forgotten.

 

Upon graduating from Yale, Shen joined Citibank in New York in 1992 and then saw an opportunity to leverage his American experience at home. China began opening its markets to the world in the 1990s, and Shen moved to Hong Kong to work at Lehman Brothers and then Deutsche Bank, helping Chinese firms raise money from global investors.

 

He watched the proliferation of internet companies in Silicon Valley at the turn of the century, thinking about how he could take a successful American business model and launch it in China.

 

He settled on an Expedia-type travel-booking platform, called Ctrip.com, which quickly became a hit, listing on the Nasdaq in 2003. Shen then rolled out a low-budget hotel chain across China, inspired by landing in Dallas-Fort Worth International Airport and driving the 20 miles to downtown Dallas. During the short trip, he counted 25 motels with brands such as Red Roof Inn and Motel 6 and decided China was ready for a budget lodging behemoth.

 

In 2004, he met Doug Leone and Michael Moritz, who co-led Sequoia at the time. The pair convinced Shen to set up a franchise of the Silicon Valley giant in China.

 

Shen again took a successful American model -- Sequoia's venture-capital investing in technology startups -- and applied it to China.

 

Sequoia China, like its U.S. counterpart had done for decades, tried to understand the biggest theme in technology and invest in companies that captured that trend, Shen told an audience at Stanford University in 2015.

 

While many of those companies would fail, the blanket approach meant a venture capitalist often got a stake in the winner. "As long as you capture all the major trends, you'll do very, very fine," Shen said.

 

In China, Shen invested in e-commerce via Alibaba and JD.com; the mobile internet through Meituan, a food delivery app, and TikTok parent ByteDance; and the emergence of China as an internet shopfront for the world via Shein and PDD, which owns Temu.

 

Shen "hit every single trend" over the past two decades, said Rui Ma, founder of Tech Buzz China, a U.S.-based research firm.

 

In 2023, Shen topped Forbes's Midas List, a global ranking of venture capitalists, for the fourth time, once again edging out his U.S.-based Sequoia peers.

 

Geopolitics remains a risk for Shen. If he becomes synonymous with Chinese AI and U.S. investors find it impossible to put their money in that field, he could be cut off from some of his biggest funders.

 

Spreading its bets, HSG is increasingly looking for big-ticket investments in private equity and has set up offices in Singapore, London and Tokyo.

 

His success has meant that many up-and-coming entrepreneurs seek an investment from Shen not just for capital but the endorsement that comes with it.

 

HSG began backing entrepreneurs in generative artificial intelligence after the introduction of ChatGPT in November 2022, investing in four of China's six most-promising AI firms, known as the Six Tigers. Recent models from two companies in Shen's portfolio -- Zhipu and Moonshot AI -- lead the Chinese pack, said Jean-Stanislas Denain of Epoch AI, a U.S.-based research firm.

 

U.S. tech firms, with tens of billions of dollars available for computing power, maintain a slight edge over Chinese rivals, according to Epoch AI.

 

Shen has told people in meetings that he's cautious about China's catch-up chances, believing that the pursuit of artificial general intelligence is a game now led by the biggest, deepest-pocketed tech firms, particularly those in the U.S. Some Chinese AI founders say lack of access to the most advanced U.S.-developed chips is hurting their competitiveness.

 

Shen believes China's advantage is that much of the industry's talent is Chinese and its entrepreneurs have historically been strong in building applications, including for consumers.

 

Last year, HSG invested in 12 AI and robotics companies inside China and 14 internationally, many of which have Chinese founders. These included Silicon Valley-based Genspark AI, an AI agent, and robot maker Genesis AI.” [1]

 

1. EXCHANGE --- An Investor Putting American Money in China's AI Push --- Neil Shen has long bridged both countries, from working at Sequoia after Yale to his own firm. Jones, Rory; Qu, Tracy.  Wall Street Journal, Eastern edition; New York, N.Y.. 21 Feb 2026: B4.