The central processing algorithm service is a service based on a series of algorithms including analytical algorithms, recommendation algorithms and acceleration algorithms, which can empower downstream industries with higher demand for data analysis and computing power optimization, and apply to internet advertising, internet game applications, finance, retail, logistics and other industries. In view of huge downstream demands, the overall market of central processing algorithm services is huge. Major players in the central processing algorithm service industry include digital marketing service providers, online game service providers and algorithm solution service providers.
With the rapid development of the computer industry and the internet industry and the increase of internet penetration rate in China, the number of internet users and internet data in China have increased significantly. The internet industry is the largest application industry for central processing algorithm services, and internet applications' demand for computing power are increasing.
According to the CIC Report, most internet users in China use mobile phones as their primary terminal. The number of mobile internet users grew strongly from 619.8 million in 2015 to 880.9 million in 2019, representing a CAGR of 5.2%.
NEW YORK, June 10, 2021 Venus Acquisition Corporation (Nasdaq: VENA) ("Venus"), a publicly traded special purpose acquisition company, and VIYI Algorithm Inc. ("VIYI Algo"), a Cayman Islands exempted company operating in China and controlled by WiMi Hologram Cloud, Inc. (NASDAQ: WIMI), announced today that they have entered into a definitive merger agreement. A newly created merger subsidiary of Venus will be merged with and into VIYI Algo with VIYI Algo being the surviving entity and becoming a wholly owned subsidiary of Venus. Upon closing of the transaction, Venus will change its name to MicroAlgo Inc.
VIYI's core customers in internet advertisement, gaming, and intelligent chip businesses represent industries experiencing significant growth in recent years and are expected to continue growing. VIYI will continue to strengthen and market its central processing algorithm solutions applicable to its core industry customers to deliver measurable results and ensure a constant stream of revenue.
The digital marketing industry has grown from RMB 218.5 billion in 2015 to RMB 665.8 billion in 2019 in terms of internet advertisement spending, representing a CAGR of 27.5%, and is expected to continue to grow at a CAGR of 8.4%, reaching RMB 1,545.5 billion by 2024, according to the CIC Report. In addition, VIYI understands its customers are increasingly focusing on measurable advertising results, with performance-based advertising solutions experiencing rapid growth. VIYI's scalable central processing algorithm solutions are well suited to meet this increasing demand and customers' need for measurable results, i.e., measurable conversion rate. For details of VIYI's range of services for internet advertisement customers, please see "Business — VIYI's Business Model — Application of VIYI's central processing algorithm service in internet advertisement."
In terms of the gaming industry, the CIC Report indicates that the overall Chinese gaming market has been continuously growing in the past five years. The market size in terms of consumer spending was RMB 275.5 billion in 2019, representing a year-on-year growth rate of 6.3% since 2018. Notably, mobile games have moved into a leading position in consumer spending and market share in relation to the overall games industry. In 2019, the market for mobile games was ranked number 1 by a proportion of 73.9% and has surpassed traditional PC and web games to become gamers' dominant choice in the market. The number of mobile gamers in China also increased from 455 million in 2015, to 620 million in 2019, representing a CAGR of 8.0%. Moreover, the average daily time spent by mobile gamers is expected to grow at a CAGR of 7.0%, reaching 30 minutes per day by 2024, according to the CIC Report. VIYI's game distribution platform coupled with the capability to provide central processing algorithm solutions to upstream developers and gamers alike is uniquely positioned to capture this growing market opportunity. For details of VIYI's range of services for gaming industry customers, please see "Business — VIYI's Business Model — Application of VIYI's central processing algorithm service in internet gaming entertainment industry."
In terms of the intelligent chip industry, according to the CIC Report, technologies that are critical to the intelligent chip industry have become increasingly mature since the beginning of the 21st century. Intelligent chips have also been entering into consumers' daily lives at an increasing rate as components to mobile phones, personal computers, and smart TVs. Since 2017, driven by the demand from emerging industries such as AI, smartphones, IoT, 5G, cloud computing, smart healthcare, and security, the global chip industry has grown from US$274.5 billion in 2015 to US$333.4 billion in 2019. Growth is expected to continue at a CAGR of 7.5% per year, reaching US$515.7 billion by 2025 due to increasing downstream demand. Notably, the AI market has significantly benefitted from the development of IoT, cloud computing technology, and an increase in government investments. From a quantitative perspective, the scale of the core industry is expected to reach RMB 400 billion by 2025, representing an increase of RMB 350 billion from 2020 to 2025. The development of AI will be a significant driving force behind the monetization market for central processing algorithm solutions intended to optimize intelligent chip performance.
From the perspective of applications of VIYI's central processing algorithms in relation to intelligent chips, VIYI understands that AI — from cloud to edge or down to terminals — is inseparable from the ability for intelligent chips to efficiently execute "training" and "inference" computing tasks, which cannot occur unless the baseline software and hardware are optimized correctly. Moreover, industrial applications of intelligent chips are wide-ranging and include information infrastructure services, electronic products manufacturing, image recognition, voice recognition, machine translation, smart IoT, and other smart applications. These demands create a distinct market for VIYI's central processing algorithms solutions, while giving off better energy efficiency ratios during such data processing exercises.
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