China’s autonomous driving chipmaker Black Sesame International (2533) is proposing to place new shares at a discount of nearly 12 percent to raise over HK$1.24 billion amid intensifying competition in the smart driving sector.

The startup plans to place 53.65 million new shares at HK$23.20 apiece, 11.79 percent lower than its closing price on Monday. These shares are equivalent to 8.55 percent of the expanded issued equity.

Black Sesame said the net proceeds will be used primarily to further support core technology research and development, which includes next-generation automotive self-driving chips. They will also be used to fund the development of end-to-end technologies as well as robotics and artificial intelligence.

Top Chinese electric vehicle manufacturers including BYD (1211) and Geely Automobile (0175) have announced plans to strengthen their AI models to speed up the progress of smart driving.