Chinese A.I. firm SenseTime Files For Hong Kong IPO Despite Tech Crackdown And U.S. Blacklist
One of China’s top artificial intelligence firms SenseTime has filed for an initial public offering in Hong Kong.
The AI company did not disclose the size of the deal but is pushing ahead with a listing even as China tightens regulation for the country’s technology industry.
SenseTime makes money by selling AI software platforms. Some of the company’s products include facial recognition and autonomous driving technology.
But the company, which counts Alibaba and SoftBank among its backers, has been caught in the middle of growing U.S. and China tensions. In 2019, SenseTime was put on the U.S. Entity List, an export blacklist which restricts the company’s ability to get access to certain technologies originating from the United States.
At the time, the U.S. claimed SenseTime was among a number of entities“implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention, and high-technology surveillance” against minority Muslim groups in China’s Xinjiang region.
Beijing has repeatedly denied allegations of human rights abuses in Xinjiang.
SenseTime said at the time it was “deeply disappointed” by the U.S. government’s decision to blacklist the company. It said it did not have business in the Xinjiang region and was unaware of its technology being used there.
If our subsidiary remains on the Entity List on a prolonged basis, we may not be able to compete effectively in certain business lines, and our business, results of operations and financial condition could be materially and adversely affected,” SenseTime said in its IPO filing.
Meanwhile, China has passed a slew of major regulations over recent months including in the areas of anti-monopoly laws and data security and protection. SenseTime cited the changing regulatory environment as another risk to its business.
“We are subject to complex and evolving laws, regulations and governmental policies regarding privacy and data protection,” the company said in its filing.
“Actual or alleged failure to comply with privacy and data protection laws, regulations and governmental policies could damage our reputation, deter current and potential customers from using our products and services and could subject us to significant legal, financial and operational consequences.”
SenseTime is growing quickly. In the first half of 2021, the company reported revenue of 1.65 billion yuan ($255.4 million), up 91.8% year-on-year. SenseTime, however, reported a net loss of 3.71 billion yuan from January to June this year.
– CNBC