XIAO-I Corporation

Good day ladies and gentlemen. Thank you for standing by and we warmly welcome you all to the Shao Ai first full year 2023 earnings conference call. Currently all participants are in listen only mode. Later we will conduct a question and answer session and instructions will follow at that time. As a reminder we are recording today's call. If you have any objections you may disconnect at this time. Now I will turn the call over to Berisha, IR Director of Shao Ai. Please proceed.

Thank you, Operator, and greetings to all participants. Welcome to Cell Ice 2023 Earnings Conference Call. Present with us today are Mr. Max Yuan, Chief Executive Officer, and Mrs. Callie Wong, Chief Financial Officer. We announced our 2023 unaudited financial results earlier today. The press release is available on the company's IR website, as well as from Newswire Services. A replay of this call will also be available in a few hours on our IR website. During this call, we will discuss our business outlook and make forward-looking statements. Please note that these comments are made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Also, the forward-looking statements are based on our predictions and expectations as of today. Actual events or results could differ materially due to some risks and uncertainties, including those mentioned in our filings with the SEC. The company does not assume any obligation to update any forward-looking statement except as required under applicable law. Also, please note that unless otherwise stated, all figures mentioned during the conference call are in U.S. dollars. With that, let me now turn the call over to your CEO, Max Yuan. Please go ahead, Max.

Thanks, Valerie. Good day, everyone, and thank you for joining us today. The year 2023 marked a turning point for the generative AI sector. with tremendous growth on the horizon. I think it is undeniable that this technology has the potential to revolutionize the entire technology sector and become an integral part of nearly every business sphere. As a game changer, AI holds immense value up for grabs. In terms of financial performance, 2023 was a year of stable growth for our company. Our total revenue reached an impressive 59.2 million, reflecting a remarkable year-on-year increase of 22.8%. This growth was primarily driven by our strategic focus on AI model services, particularly our Huazhang LLM, which spearheaded the growth of our mass business by 48.5%, reaching $19.2 million. Simultaneously, our non-mass business also experienced healthy growth, with revenues increasing by 13.4% to reach $40 million. I am delighted to announce that 2023 has been a pivotal year for us, marked by groundbreaking initiatives If you were present at our 2023 Interim Results Call, you may recall the exciting news I shared that in July 2023, we launched our own JGPT, Huazhang Universal Large Language Model. In simple terms, it encompasses a wide range of capabilities and addresses the key challenges faced by global AI models. It is designed to be controllable, customizable, and deliverable. Another highly promising initiative I want to highlight is our Huazhang ecosystem, which was built upon the strong foundation of our Huazhang LAM and was introduced in October 2023. This ecosystem represents a revolutionary development with significant implications for the industry. Also, it not only streamlined our processes but also empowered us to provide tailor-made solutions to our customers, enabling them to create unique and branded conversational AI experiences. In just a few months since its launch, we have successfully implemented the Huazhang ecosystem, facilitating the commercialization efforts of our partners in various industries. The system is now collaborating with thousands of ecosystem partners across more than 50 industry fields, including finance, healthcare, automobile, and manufacturing. This success validates the commercialization path of the Huazhang ecosystem. With such robust support, I eagerly anticipate unlocking significant commercial potential and generating substantial returns for the company in the near future. Next, I want to emphasize the critical importance of strong research and development capability for our ongoing success and our ability to create innovative solutions in the rapidly evolving field of AI technology. We are dedicated to meeting the needs of our customers by listening to their feedback and requests and responding with new solutions and enhanced features. As of March Our research and development team consists of 158 talented individuals, making up 56.2% of our overall workforce. Among them, we have 104 bachelor's degree holders, 17 master's degree holders, and 7 individuals with many of our senior engineers have accumulated more than a decade of experience in the computer, Internet and AI industries. Additionally, we collaborate with a number of AI experts from renowned universities and research institutes. I am pleased to share with you that as of December 31, 2023, we had a total of 258 patent applications, including pending expelled and transferred cases, excluding granted patents. We also abated 318 patent grants and registered 137 software copyrights. In 2023 alone, we filed 36 new patent applications, received 39 patent grants, and registered 7 software copyrights. Among these, there were 6 patent applications specifically related to large models, all filed in 2003. and three registered software copyrights in the same category. Additionally, there were two patent applications related to OOTD Fusion, our upcoming new network architecture for realistic and controllable virtual try-on. It is worth noting the high popularity of OOTD on GitHub and the discussions on PlatformX. indicating significant attention from potential consumers and promising prospects for product commercialization. To further strengthen our capabilities, we have established joint laboratories with SME institutions such as the Institute of Software of the Chinese Academy of Science, is China Normal University and Hong Kong University of Science and Technology. Furthermore, we have fostered close partnerships with Tsinghua University, Fudan University, Shanghai Jiao Tong University, Beijing University of Posts and Telecommunications and Peking University. Together, through our own Weavering commitment to research and development, we are poised to conquer new horizons and shape the future of AI technology. Moving on to another key strategic focus, globalization. Our efforts towards global expansion gained momentum with the establishment of two overseas subsidiaries in the US and the United Arab Emirates. These strategic initiatives are integral to our vision of becoming a global leader in AI technology, enabling us to better serve our customers and seize opportunities in new markets. In conclusion, 2023 was a year of unprecedented growth, innovation and strategic expansion for HIAI. As we embark on the journey ahead, fueled by the successes of the past year, we are confident that we are well positioned to continue our trajectory of growth and leadership in the AI industry. Looking ahead into In 2024, we expect that the Huazhang LIM is set to further strengthen its commercialization efforts. Delving deeper into understanding and meeting customer needs, we expect our B2B operations to continue to exhibit a robust and consistent growth strategy with around 20% of growth rate on a yearly basis. At the same time, the advent of AI has significantly expanded the potential for AI in consumer applications. We believe the integration of AI models and consumer applications has become more seamless and impactful driven innovation and meeting consumer demand more effectively. Hence, we further expand our business into the B2C market. On the front of R&D, we will continue to make endeavors and investments to strengthen our product capabilities. Collaborative efforts with our partners and customers to integrate our large language model will be a central part of our approach. As you may have noticed, we have recently announced very exciting progress regarding several new products, including OOT diffusion, as I mentioned earlier, is a new network architecture for realistic and controllable virtual trials, and this daily investor-focused platform that utilizes advanced AI technology to provide capital market answers and insights on par with professional investors, supporting investment decision-making, our commitment to pushing boundaries and revolutionizing Industries will propel us towards a future where AI has a profound impact on people's lives. Together with our partners and customers, we will continue to embrace new challenges and seize opportunities to shape the world through cutting-edge AI solutions. Now, let me turn the call over to our CFO Kelly to go over our financials.