“Our ambition was not to be a small company making enough money in China to feed ourselves. Our vision was to be an internationally successful company, so we had to go overseas. Big whales have to swim in the ocean,” Li told This Week in Asia.
Originally based in Hangzhou, GreaterHeat's predecessor, Digicode, saw its business grow many-fold in the years leading up to 2020.
But with the Chinese government taking a tougher stance on cryptocurrencies since 2021, and crypto mining being one of Greater Heat’s primary services, Li has sought to make his fortune elsewhere.
“For Chinese people, the main business and living centres are mainland China, Hong Kong, Taiwan and Singapore. We had decided to leave mainland China. We chose Singapore because there are problems and uncertainties in Taiwan and Hong Kong,” Li said in Mandarin.
He added that Hong Kong was never even considered because it is too geographically close to China, and Greater Heat is relocating to Singapore in 2021.
Greater Heat is part of a wave of Chinese AI companies relocating to Singapore in the wake of U.S. restrictions aimed at access to the mainland's top-end chips and other tech equipment.
Singapore was home to more than 1,100 AI startups as of the end of last year, according to media reports, although the country does not release country-specific data.
The exodus comes as AI and Web3 are being hailed as technology engines that will decentralize the internet through distributed databases and create new products and services to transform business.
Singapore's AI strategy commits the government to step up incentives for the sector, including supporting the expansion plans of AI startups and encouraging companies to set up AI “centre of excellence”.
In 2022, Greater Heat posted revenue of $27 million. Lee said revenue is on track to grow to more than $37 million in 2023. The company currently has about 100 employees worldwide, with offices in South Korea, Malaysia and Texas.
Mr Lee said the main reasons Singapore is attractive to AI companies are its legal system, strong intellectual property protection, and multilingual and multicultural society.
The main reason for AI companies to base their headquarters in Singapore is its high level of internationalization.
According to Lee, AI companies are choosing Singapore not just to target the US market. “If your goal is to enter the US market, you can headquarter in San Francisco or Silicon Valley. The main reason why AI companies headquarter in Singapore is because of the high level of internationalization, which makes it easier for companies to conduct global operations,” he said.
The overwhelming majority of the Singapore office's 15 staff are local, and Lee says these Singaporean workers are “highly adapted to the global business environment”.
When Li first assessed the business situation in China, he felt that the fierce competition with many companies participating would likely shrink opportunities for his startup in the long run. The slowdown in foreign direct investment was another reason why he decided to relocate his company.
“Currently in China, there is hyper-competition among lower-level companies. It's like students who want to get good grades have to work twice or three times as hard to get good grades, but in many cases it's a waste of time and effort.”
Li said the company is on target to earn at least 80 percent of its revenue outside China this year, with South Korea, Malaysia and Japan being its key markets.
Mr. Lee plans to stay in Singapore for the long haul — his wife gave birth to their first child, a boy, here last year, and their permanent residency applications are pending — and he's a fan of black pepper crab, a popular local dish.
Lee is not giving up on expanding his business in Singapore despite recent steps by local authorities to step up scrutiny of foreign assets following a money-laundering bust worth S$3 billion (U.S. $2.2 billion).
03:08
Could this high-tech fish farm help Singapore source more locally grown food?
Could this high-tech fish farm help Singapore source more locally grown food?
“We welcome Singapore's regulations and policies. I am a businessman and I am not afraid of policies and regulations. I am more afraid of the uncertainty,” Mr Li said.
“In Singapore, complying with regulations allows us to conduct business unhindered. Moreover, policy changes are usually introduced with sufficient adaptation time rather than immediate effect.”
Mr Lee expressed confidence in the long-term prospects for Singapore's AI industry, and said he looks forward to working with the government as he believes their goals are aligned with those of Greater Heat.
Outside of work, Mr Lee said his family feels very comfortable living in Singapore thanks to the safe and clean environment. They rent an apartment just a five-minute walk from Mr Lee's office. Mr Lee and his wife have also made new friends from their home province of Henan, who live close to the apartment.
“When my son starts school here, I will have to move farther away from my office. I want to live close to the school to prioritise my son's needs, so naturally I am the second priority in my family.”
