Chinese Professor Defies Odds On Way to $3.4 Billion Fortune
US by SenseTime Group Inc. Just weeks after a U.S. unit was blacklisted for alleged human rights violations, the firm is set to make founder Tang Xiao one of the world’s richest men. China’s largest artificial intelligence company raised the price of its initial public offering by HK$3.85 (49 cents) per share, to HK$5.55 billion.
That was below the expected range, but a sign that the country, including its vast surveillance machinery, continues to churn out huge fortunes and massive profits for venture capitalists, despite rising tensions with the US and Beijing’s crackdown on tech giants .
According to the Bloomberg Billionaires Index, Tang, 53, a Massachusetts Institute of Technology graduate and professor of information engineering at the Chinese University of Hong Kong, holds a 21% stake in the company and is worth $3.4 billion.
A representative for SenseTime declined to comment on Tang’s net worth.
SenseTime was long expected to be a blockbuster public offering, but it has come under fire in recent years. It was forced to delay the listing this month after the US alleged that the company’s facial recognition software is used to persecute Uighur Muslims in western China’s Xinjiang Autonomous Region. Sensetime has said that the allegations, which led to the ban, are baseless.
SenseTime is the first overseas offering by a high-profile Chinese tech unicorn since the July IPO of ride-sharing giant Didi Global Inc in New York sparked a regulatory backlash by authorities in Beijing. The shares are set to begin trading in Hong Kong on December 30, giving the company a market value of more than $16 billion.
Tang has long been involved in developing the artificial intelligence needed for facial recognition.
He earned a bachelor’s degree from China’s University of Science and Technology, then graduated from the University of Rochester in New York, and received his PhD from MIT in 1996, where he studied underwater robotics and computer vision.
He worked for Microsoft Research Asia for a few years and co-founded Shanghai-based SenseTime in 2014 with Xu Li, a research scientist at Chinese computer manufacturer Lenovo Group Ltd. The company attracted an initial investment from IDG Capital and then raised backers. SoftBank Group Corp., Alibaba Group Holding Limited and Silver Lake.
According to the prospectus, it is now the largest AI software firm in Asia with 11% market share. The technology has been deployed in many areas, including helping police in China, providing product placement in movies and creating an augmented reality scene in a mobile game by Tencent Holdings Ltd.
SenseTime resumed its IPO process a few days after the blacklist, in which a group of cornerstone investors raised their stakes from $450 million to $512 million. Among them were China International Capital Corp., Haitong International Securities Group Ltd. and HSBC Holdings plc.
The company later uploaded a legal opinion to the Hong Kong Stock Exchange, claiming that the restrictions did not apply to the approved entity’s parent company. While the size of the offering remained the same, retail investors reportedly expressed greater caution. finally share
“It makes sense that retail investors looking for short-term gains have become less bullish with the approval factor,” said Kenny Ng, strategist at Everbright Sun Hung Kai. “Especially since the overall Hong Kong stock market hasn’t been performing well lately.”
SenseTime’s revenue rose 14% to 3.4 billion yuan ($534 million) last year, though it still posted an operating loss of 1.8 billion yuan.
“Tech companies in the early stages still need to invest more in research and development to keep their technology competitive,” Ng said. “For SenseTime, maintaining steady earnings growth is more important than becoming profitable in the short term.”
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)