IPO SenseTime: US Imposes US Investment Ban on AI Firm
The Chinese artificial intelligence startup was supposed to price the shares on Friday when it IPO in Hong Kong, where it planned to raise up to $ 767 million.
But its preparations to go public were overshadowed by news that Washington was adding SenseTime to yet another trading blacklist.
The US Treasury Department confirmed on Friday that it had decided to place the company on a list of “companies in the Chinese military-industrial complex”, in which US President Joe Biden has banned Americans from investing.
The US Treasury said SenseTime was sanctioned because of the role its technology plays in human rights abuses against Uyghurs and other Muslim minorities in Xinjiang.
“SenseTime (…) owns Shenzhen Sensetime Technology Co. Ltd., which has developed facial recognition programs that can determine a target’s ethnicity, with particular emphasis on identifying ethnic Uyghurs,” the department said in a statement. âWhen applying for the patent, Shenzhen Sensetime Technology Co. Ltd. highlighted his ability to identify Uyghurs wearing beards, sunglasses and masks.
In a statement on Saturday, SenseTime said that “we strongly oppose the designation and the accusations that have been leveled against it.”
“The accusations are unfounded and reflect a fundamental misunderstanding of our business,” he added. “We regret being caught in the midst of geopolitical disputes.”
The firm also pledged to “take appropriate measures to protect the interests of our company and our stakeholders”, without further clarification.
SenseTime added that it operates “as a software company committed to promoting the sustainable, responsible and ethical use of AI,” which has “complied with applicable laws and regulations … in the jurisdictions in which we do business. “.
The company said it has formed an “AI Ethics Council, made up of internal and external experts, [which] ensures that our company strictly adheres to recognized ethical principles and standards. ”
The company previously said it had developed its “AI code of ethics to ensure that our technologies are used responsibly,” and said sales to customers in Xinjiang comply with Chinese law.
The company also claimed that “none of our major investors, customers or suppliers have withdrawn their investment or stopped doing business with us due to the addition of the entity list.”
But he acknowledged the potential headwinds, saying “we are subject to risks associated with international trade policies, geopolitics and trade protection measures, and our business, financial condition and results of operations could be affected.” .
AI under surveillance
But the firm is best known for its facial recognition software, which has long been the subject of controversy.
In a statement at the time, SenseTime told CNN Business that the reference to Uyghurs was “regrettable”, adding that it was “one of the examples of the app intended to illustrate attributes recognized by the ‘algorithm”.
“It was neither designed nor intended in any way to discriminate, which is contrary to our values,” said a spokesperson. “We will update the patent at the next available opportunity.”
More recently, in its investment prospectus, SenseTime said that its “previous sales to customers in Xinjiang complied” with Chinese laws and that sales revenues were less than 1% in the past three years.
SenseTime was scheduled to start trading in Hong Kong on Friday, December 17.
– Brian Fung and Ben Westcott contributed to this report.