Chinese AI company SenseTime postpones HK IPO after US ban

Chinese AI software company SenseTime has announced its plan to delay its Hong Kong initial public offering (IPO) after the US government had placed the company on its investment blacklist. 

In a statement, the company said there will be a postponement of the global offering and the listing. The company expects to publish the supplemental prospectus, which amends and supplements the prospectus together with the updated listing timetable, the relevant procedures for applications for Hong Kong offer shares and other relevant information. The company added that it remains committed to completing the global offering and the listing soon.

On Monday, Reuters reported that SenseTime had planned to withdraw the IPO and updated its prospectus to include information about the potential impact of the US investment ban. The company hoped that the amendments can help relaunch the IPO process. Originally, SenseTime planned to sell 1.5 billion shares in a price range of HK$3.85 to HK$3.99. The IPO would raise up to US$767 million, lower than the estimated amount of US$2 billion earlier this year. 

The company said on 10 December, the US Department of the Treasury added SenseTime to the non-specially designated nationals Chinese military-industrial complex companies list, adding that to safeguard the interests of the potential investors, it needed to delay the IPO. The company did not tell the timeline for a revised IPO. 

The US Department of the Treasury accused SenseTime of having developed facial recognition programmes that can help determine an individual's ethnicity, particularly identifying ethnic Uyghurs.

In another statement, SenseTime said it strongly opposed the designation and accusations that had been made by the US Department of the Treasury. 

"The accusations are unfounded and reflect a fundamental misperception of our company. We regret to have been caught in the middle of geopolitical tension. As a software company committed to promoting the sustainable, responsible and ethical use of AI, we have complied with the applicable laws and regulations in relation to our business in all material respects in the jurisdictions where we conduct business," the company said. 

It added, "Our AI ethics council, comprising both internal and external experts, ensures that our business strictly adheres to recognised ethical principles and standards. We have developed a code of ethics for AI sustainable development, and we collaborate closely with third-party institutions and international organisations to ensure the responsible and sustainable development of AI technology."

Photo courtesy: SenseTime

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