SenseTime, China’s public biometric software and compute services company, has a market capitalization of $5.9 billion. That’s almost a dollar for everybody alive right now, and good reason to celebrate. Except that SenseTime‘s market cap was $16.5 billion at its IPO in December 2021, according to analysis in the Financial Times. The business that made the company a unicorn – sales of biometric surveillance systems – is suffering. Even in China, there is a limit to surveillance budgets and the number of people to be watched. In fact, the Times says the company’s surveillance-heavy smart city revenue dropped 58 percent from January through June. And developed economies object to how facial recognition is used by Beijing’s to oppress that nation’s Uyghur population. Western sanctions have stunted business goals that SenseTime had for the lucrative North American and European Union markets. At the same time, revenue from AI-chips-as-a-service is threatened by the chip war being waged by the United States. Viewing China’s aggressive foreign and domestic policies Washington doesn’t want U.S. companies investing in Chinese quantum computing and AI development, according to the Times. Chipmakers including Nvidia now cannot openly sell chips in China. 7 That hurts because SenseTime had pinned much of their future on data centers stuffed with hardware running advanced AI chips. Companies and other organizations can lease time on the chips for modeling algorithms. A meaningful reversal of fortunes is unlikely, the Times surmises. It might require a fundamental overhaul of the current East-West relationship or a big and sustained strengthening in the world economy.
