United States officials plan to ban American investment in Chinese artificial intelligence (AI) unicorn SenseTime Group Limited, the Financial Times reported on Friday. In response, SenseTime issued a statement on Saturday saying that it strongly opposes this decision and related allegations. The company also claimed that the decision and related allegations were groundless and reflected a fundamental misunderstanding of SenseTime.
The Financial Times said that the US Treasury Department will put SenseTime on the blacklist of “China’s military-industrial complex companies” on Friday, which is part of a series of sanctions imposed by the United States on many countries to mark Human Rights Day on December 10. According to the relevant policies of the US, once included in the list, American investors will not be able to buy shares of SenseTime.
Sources in the report pointed out that this action indicates Washington believes that SenseTime has assisted in human rights violations against Muslim Uyghurs in Xinjiang. On Wednesday, the US House of Representatives passed a bill to bar companies from importing goods from Xinjiang unless they could proved that no forced labour was used in the manufacturing process.
News of the blacklisting broke just as SenseTime was preparing to go public in Hong Kong. The public offering of SenseTime started on December 7 and ended at noon on December 10. The final offering price and placement results are expected to be announced on December 16, and it is expected to be listed on December 17.
For American shareholders of SenseTime, the blacklisting may cause problems. Silver Lake, a private equity firm with a 3% stake in SenseTime, has agreed to ban the sale of a portion ofshares for six months after the IPO; Fidelity and Qualcomm also have stakes in SenseTime.
In this regard, SenseTime said that the development of science and technology should not be influenced by geopolitics. SenseTime is a leading AI software company, committed to developing sustainable, responsible and ethical AI technologies and applications.
SenseTime said that the company has also cooperated extensively with third-party organizations and international organizations, and formulated a series of ethical governance principles for the sustainable development of AI in a responsible manner.
After being restricted from investment, the report mentiones SenseTime may have to postpone its IPO because banks need to make adjustments and solve regulatory concerns. The company may also need to update its prospectus that details the risks faced by potential investors to reflect the development of the “blacklist”. In the report, people familiar with the matter said that suspending or withdrawing the listing would make it more difficult for SenseTime to meet the needs of early investors, with whom it has reached an agreement to list before a certain date.
In fact, this is the second time that SenseTime has been targeted by the US. As early as 2019, SenseTime was listed on the “Entity List” by the US Department of Commerce. At that time, Chinese AI enterprises such as Hikvision, Dahua Technology, iFlytek and Megvii were also added to the “Entity List”. These enterprises face export controls from the United States which meant that specific American goods, technologies or services could not be provided to these enterprises without the permission of the US Department of Commerce.
According to its official website, SenseTime is a unicorn enterprise established in 2014, focusing on AI technology. The company has received investment from Alibaba, Temasik and other capital firms. Its technologies are applied in many industry verticals including smart business, smart city, smart life and smart auto.