Shares of SenseTime have almost doubled since its closely watched initial public offering last week, adding $2 billion to the net worth of Tang Xiao’ou, cofounder and the largest shareholder of the Chinese AI giant.
SenseTime’s shares are up 81% since December 30, when it listed on the Hong Kong stock exchange. As of Wednesday’s close, Tang’s stake in SenseTime is worth about $6 billion, up from nearly $4 billion when the company went public.
The company’s shares have continued to rise, despite the U.S. Treasury Department adding it to a list of Chinese military-industrial complex companies on December 10, banning Americans from investing in the company. It cited SenseTime’s development of facial recognition software being used to help the Chinese government identify ethnic Uyghurs in Xinjiang.
SenseTime makes most of its money from its software platforms. For example, its software helps businesses digitalize and automate workflow processes. Governments also use SenseTime’s software to transcribe real-time city data into alerts like tracking road damage or traffic accidents. The company’s other software platforms include self-driving AI technologies and smart healthcare tests that can automatically detect lung diseases, including from Covid-19.
In the first half of 2020, SenseTime’s AI software platforms designed for cities brought in 786.3 million yuan (about $124 million) in revenue, up 240% from the same period the previous year, while revenues from its business software platforms increased 60% to 647.1 million yuan.
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AI’s ability to quickly analyze and interpret large amounts of raw data has created demand in markets such as healthcare, electric vehicles and infrastructure. The success of SenseTime, which was founded by a team of academics from the Chinese University of Hong Kong, where Tang teaches information engineering, is from being able to produce these cost-effective and high-performing AI models, the company said in its prospectus.
The AI software market in China is expected to be the fastest-growing among major markets globally, expected to be worth 167.1 billion yuan (about 26.3 billion) in 2025, while global AI-enabled business opportunities are expected to reach 10 trillion, according to Frost & Sullivan research cited in the prospectus.