The first Chinese artificial intelligence (AI) company that could go public outside the mainland would face significant risk thanks to a combination of its unclear relationship with government security operations and ongoing external turbulence, analysts say.

Megvii Technology Limited, the Beijing-based AI firm that developed the widely-used facial recognition system Face++, has filed for an initial public offering in Hong Kong, according to a prospectus released Sunday.

The company’s revenue has grown rapidly in the past three years and more than tripled year-on-year in the first half of 2019 to a total of 949 million yuan, according to the prospectus. Megvii was valued at over $4 billion after its latest fundraising round earlier this year.

However, analysts told Caixin Megvii is exposed to a fair amount of risk due to speculation about its relationship with the government’s public security operations, earlier reports about a possible U.S. blacklisting, and ongoing turbulence in Hong Kong’s financial market.

IPO applications for the Hong Kong Stock Exchange usually take three months to process, so the listing is expected to occur in the fourth quarter of the year. The IPO will test the waters for Megvii’s AI start-up peers and could indicate how capital markets outside China will receive these companies.

Read this story in full later today on Caixin Global.

Contact reporter Isabelle Li (liyi@caixin.com)