SenseTime was once the most valuable AI startup in the world. But now the controversial Chinese AI company is in a deep crisis – the shares even collapsed to an all-time low at times.
• SenseTime shares fell under the wheels in 2023
• Billionaire founder dies unexpectedly of an unknown illness
• Shortseller Claims: SenseTime Artificially Inflated Revenue
The semi-public AI company SenseTime initially experienced a rapid upswing after its founding in 2014. This was thanks, at least in part, to its direct connections to and funding from the government in Beijing. SenseTime develops technologies for facial recognition, object recognition and video and image analysis using artificial intelligence. During the corona pandemic, Chinese authorities used them not only to measure temperatures, but also to determine whether citizens were wearing a mask as required, and for identification – even with a mask.
In the sights of the USA
Nevertheless, the company, which was seen as a role model for China’s AI capabilities thanks to founder Tang Xiao’ou’s research achievements, stumbled in 2019 after the US blacklisted SenseTime. In Washington’s view, SenseTime is part of China’s “military-industrial complex.” According to criticism, the technologies developed there are being used for mass surveillance of the Uyghurs in the Xinjiang province and thus for human rights violations. Although SenseTime has repeatedly denied these allegations, the company is no longer permitted to purchase certain key technologies in the United States.
In 2021, US sanctions even meant that SenseTime had to postpone its planned IPO for several months. Although the company still managed to enter the trading floor on December 31, 2021, the share price has suffered greatly since then.
Death of company founder Tang Xiao’ou
In 2023 alone, the SenseTime share price has roughly halved and even fell to a new all-time low in December. The company was hit hard by the sudden death of Tang Xiao’ou, who founded SenseTime in 2014 together with Xu Li, the company’s managing director.
“It is with great sadness that we announce the passing of Professor Tang Xiao’ou, our beloved founder, a renowned scientist in the field of artificial intelligence (AI), director of Pujiang Lab, director of Shanghai AI Lab and professor at the Chinese University of Hong Kong “Professor Tang passed away due to health reasons at 11:45 p.m. on December 15, 2023,” SenseTime wrote on the company website on December 16. No information was given about the nature of Tang’s health problems or whether his illness was previously known.
As the South China Morning Post reported, the death of the company’s founder comes at a time when SenseTime is seeking to diversify its business and focus more on generative AI. In this context, SenseTime received approval in August to launch its own answer to the chatbot ChatGPT developed by Open AI.
Criticism from short sellers
However, Tang Xiao’ou’s unexpected death wasn’t the only setback SenseTime suffered in 2023. Just weeks before Tang’s death, Grizzly Research had accused the AI company of “highly questionable revenue-shifting plans”: “We believe SenseTime’s core business, facial recognition, is failing due to intense competition and the fact that the Chinese government is simply not offering highly profitable contracts companies that are majority foreign-owned has become notoriously unprofitable,” “Business Insider” quotes from a report published by the US-based shortseller at the end of November. As a result, SenseTime has started to provide customers directly or indirectly with funds so that they can then use them to purchase SenseTime goods. Grizzly Research alleges that these goods may never have been delivered.
SenseTime denied these accusations, telling the Hong Kong Stock Exchange “that the report is baseless and contains unsubstantiated allegations and misleading conclusions and interpretations. The report also demonstrates a lack of understanding of the company’s business model and financial reporting structure, as well as an inadequate reading of the “public documents of the company”. But despite this denial, many shareholders sold their shares and sent SenseTime shares downwards.
Possible suicide?
According to IT Times, rumors are now circulating that Tang may have taken his own life, possibly as a result of these allegations. According to Forbes, the 55-year-old, with a doctorate from the Massachusetts Institute of Technology (MIT), had a net worth of $1.1 billion at the time of his death, made up entirely of the value of his SenseTime shares . This means that Tang’s assets have recently shrunk drastically, as according to Forbes it still amounted to 6 billion US dollars in 2022.
HERE YOU WILL FIND IMMEDIATE ADVICE AND HELP FOR DEPRESSION AND SUICIDE THOUGHTS
Free depression information telephone: 0800-33 44 5 33
Free telephone counseling: 0800-111 0 111 or 0800-111 0 222
Editorial team finanzen.net
Selected leverage products on SenseTime Group
With knock-outs, speculative investors can participate disproportionately in price movements. Simply select the lever you want and we will show you suitable open-end products on SenseTime Group
The leverage must be between 2 and 20
Advertising