Li was among the first Chinese to study in the US before returning to teach in Hong Kong’s pre-eminent technology university. From there, he’s groomed a generation of entrepreneurs and set up an incubation academy, funding or nurturing promising players in robotics and artificial intelligence valued at almost $12 billion.
Intentionally or not, the robotics expert is playing an increasingly pivotal role in a battle between the US and China to dominate defining technologies. As Washington prepares to broaden sweeping curbs against its rival’s chip and AI sectors, Li’s talent for ferreting out scientific achievements is likely to prove more crucial than ever.
“In crisis is opportunity born,” he told Bloomberg News on the sidelines of a conference in Hong Kong. “Historically, Chinese companies and their technology have been second choice for even local companies. But now they have the chance to transcend that.”
It’s a characteristically optimistic perspective from Li, member of a select club of venerated intellectuals-turned-financiers that includes Turing Award-winner Andrew Chi-Chih Yao. Like his peers, the robotics savant Li has been at the forefront of some of the most important Chinese innovations of the past decade — tracking the country’s evolution from world’s factory to hothouse for technology giants.
Li wouldn’t comment at length on Washington’s efforts to contain China’s ascendancy — a sensitive topic as relations between the two countries edge toward their most tense in decades.
“No matter how intense the conflict gets between the US and China, no matter how the decoupling proceeds, the fact is it’s akin to losing 800 soldiers for every 1,000 killed,” he said.
But it’s clear the pendulum has swung in his favor, as Beijing galvanizes efforts to replace US hardware and circuitry, and cracks down on a decade of free-wheeling expansion by internet giants. Li, who operates privately and without ties to the government, nonetheless has good official contacts. He was among about 40 honorees chosen by the Shenzhen government in 2020 for their role in helping transform the once sleepy fishing village into a southern economic powerhouse.
While social media and retail internet pioneers from ByteDance Ltd. to Alibaba Group Holding Ltd. and Tencent Holdings Ltd. once hogged the limelight, an increasing amount of capital is now flowing into hard-core tech pursuits like semiconductors, robotics and AI. Xi Jinping this month renewed calls for China to step up the development of such technologies for the sake of national security.
That’s where Li comes in.
He studied in the US in the 1970s and 1980s, joining the early waves of Chinese students along with fellow academic Yao. It was a life-changing experience for a native of the same landlocked agrarian province of Hunan that birthed Mao Zedong.
While awaiting college admission, Li worked in a school-run factory making electric insect traps. He was one of the lucky ones — winning a seat at a local school before discovering the joys of scientific rigor abroad.
After getting a PhD in electrical engineering and computer science from the University of California at Berkeley, he became a research scientist at the Massachusetts Institute of Technology, then joined the robotics lab at New York University.
“Going to college in the US was a big turning point for me,” Li said, adding he benefited from the liberal thinking prevalent at Berkeley.
In 1992, he finally headed homeward to join the Hong Kong University of Science and Technology.
It was in the Asian financial center that he developed a passion for cultivating startups. In nearly three decades spent there, he’s backed scores of startups via his incubation platform, Xbotpark. Their total market value now exceeds 80 billion yuan ($11.5 billion), according to Li.
Some are leaders in their respective spheres, others attracted global financiers including Sequoia China and Hillhouse Capital. None are better known than SZ DJI Technology Co.
Li is credited with salvaging the startup when it hit its nadir, and still holds the post of chairman. Many employees, disillusioned with its prospects, had quit. Several even began copying and selling its products. Founder Wang Tao needed $100,000 to keep his year-old startup afloat — so he turned to his college mentor Li.
The professor made his protege wait outside his classroom for two hours, but finally agreed to the capital infusion. Crucially, the MIT-trained academic brought many of his other students on board. That was in 2007. Today DJI is valued at $15 billion and commands three-quarters of the consumer drone market.
“DJI was China’s version of the American dream,” Li told Bloomberg News last month. “It was a student-led vision that became reality without a single bit of military or government resources — just the markets at work.”
A pattern emerged of Li pushing beyond scholarly endeavor and into real-world results, to the extent he often staked his most promising students some cash to get them started.
The founders of ePropulsion in 2012 for instance were torn between focusing on the technology over going commercial, till Li stepped in and advised them to get a more popular low-powered electric motor to market first. That saved the company, recalled co-founder and CEO Tao Shizheng.
“Talk is cheap, show me your code. Paper is cheap, show me your project,” said Zhang Di, the founder of Direct Drive Tech, reciting a favorite mantra of Li’s. Ironically, Zhang dropped out of Li’s masters program soon after his teacher stumped up 300,000 yuan for his drive motors startup. His company is now backed also by 5Y Capital.
DJI’s Wang, who also goes by Frank, is arguably the best-known of Li’s disciples. After Wang’s brush with piracy, the professor advised the model airplane enthusiast to focus overseas first, then expand into industrial drones. Wang’s company even developed a driving system for a car with SGMW, a venture between SAIC Motor Corp., General Motors Co. and Liuzhou Wuling Motors Co., that went on sale in August.
DJI’s success laid the foundation for Xbotpark, Li’s current passion. The professor sold part of his stake in the drone giant to bankroll the incubation platform with two professors in 2014 in Dongguan, less than two hours from manufacturers and shipping terminals in Shenzhen, Guangzhou and Hong Kong.
It’s had a few notable hits. Hai Robotics, a provider of robotics systems to Philips and SF Express, got over $100 million of financing in June at a valuation of almost $2 billion. Robo-vacuum maker Narwal was the first project incubated at Li’s Xbotpark and now, valued at more than 10 billion yuan, cleans a million households worldwide. Sequoia China and Hillhouse Capital-backed EcoFlow, the battery unicorn founded by a former DJI employee that won a coveted “Little Giant” label from Beijing in 2021, is preparing a domestic IPO.
Not all of Li’s bets have paid off. Of the dozens of ideas he’s financed or endorsed over the years, only a handful have evolved into unicorns or global names. But more often than not, his proteges benefit from his contacts in finance and tech. “Professor Li’s personal brand is very influential in the industry,” Zhang said.
It helps that Li’s efforts dovetail with Beijing’s vision. In robotics alone, the Ministry of Industry and Information Technology is targeting average annual revenue growth of more than 20% to 2025 in a five-year plan unveiled December.
In recent years, Li opened satellite XbotPark locations across the country from Ningbo to Chongqing. He also set up an investment fund with Sequoia and Hillhouse to directly finance members, including Zhang’s Direct Drive Tech, though he declined to provide specifics on its capital.
He envisions Xbotpark becoming one of several unicorn birthing grounds, just as Beijing diverts more capital toward semiconductors, AI, cleantech and cars. But it’s a little like setting out to scale the world’s tallest peaks, Li admits.
“These politicians, all they can see are the giant companies,” he said. “What they fail to notice is the grassroots technology movement, yet the firms that spring from that represent our future hopes and dreams.”