China is injecting heavy capital into AI drug makers to build its own biotech ecosystem. METiS TechBio, a company in Hangzhou founded in 2020, raised 400 million yuan in August last year. This funding came from two government-linked funds: the Beijing Medical and Health Industry Investment Fund and the Daxing Industrial Investment Fund. METiS uses AI to improve drug delivery and developed MTS-004, an oral drug for neurological disorders. This drug has completed Phase III trials, making it China’s first AI-designed drug to reach this stage. The company plans to seek regulatory approval in China this year. In 2022, METiS raised about US$150 million from various domestic investors, including state-linked insurers PICC Capital and China Life Private Equity, and venture firm HongShan. HongShan was formerly known as Sequoia China before splitting from its US parent in 2023. METiS is also thinking about an initial public offering in Hong Kong that could raise about US$200 million, according to a Bloomberg report from May last year.