SenseTime, the Chinese AI company known for its advanced facial recognition technology, is on track to achieve profitability within the next two years. Its revenue from the generative AI business tripled last year and is expected to become the company’s new profit engine. According to CEO and co-founder Xu Li, SenseTime reported a revenue of 1.184 billion yuan (US$163.4 million) from its generative AI-related business in 2023, marking a significant year-on-year increase of 199.9 percent.
Last year, SenseTime launched its self-developed large language model (LLM), SenseNova, in response to the surge of LLM projects in China. Xu expressed optimism about the future growth potential of the generative AI sector, stating, “We set the goal for a 100 percent growth of our generative AI business this year, but I think the actual growth could be even higher.”
Despite the strong performance of its generative AI business, SenseTime has yet to turn a profit. However, Xu predicted that the generative AI business would be profitable within a year or two. He explained that the company is currently in the investment phase and is exploring potential business models.
SenseTime’s generative AI business has become one of its core segments, accounting for 34.8 percent of its total revenue. However, the company experienced a decrease in total revenue last year, with a loss of 6.49 billion yuan. Xu attributed these losses to the heavy investment in research and development that many tech start-ups go through.
SenseTime’s shares are currently trading at 76 percent below their IPO price, facing challenges due to various factors, including being put on Washington’s Entity List in 2019 and being subject to a US investment ban in 2021. Despite these restrictions, SenseTime has been exploring opportunities outside its traditional AI business, such as smart city and smart business solutions. The company has also developed a Model-as-a-Service (MaaS) business model to provide cost-effective AI applications to enterprise customers.
SenseTime’s generative AI services have been deployed in various sectors, including telecommunications and financial institutions. Xu believes that, in the future, the company has the potential to become an AI infrastructure platform and focus on one or two vertical sectors that have strong profitability.
SenseTime’s co-founder, Tang Xiao’ou, who was a significant figure in Chinese AI, passed away in December of last year. His contributions to the company and the field of innovation and entrepreneurship were highly regarded, both within SenseTime and by the government.
With its strong growth in the generative AI business and plans for profitability in the near future, SenseTime is poised to solidify its position as one of China’s leading artificial intelligence companies. Despite the challenges it faces, the company continues to innovate and explore new opportunities in the AI industry.
Use the share button below if you liked it.