A Chinese artificial intelligence professor is poised to join the world’s billionaire ranks as SenseTime, the AI company he cofounded seven years ago, has filed for an initial public offering in Hong Kong.
Tang Xiaoou, who earned a Ph.D. in computer vision from the Massachusetts Institute of Technology in 1996, has amassed a fortune of $2.3 billion. The 53-year-old, now an executive director of the company, is the largest individual shareholder owning at least 21.7% of the company and possibly as much as 27%, according to Forbes estimates that are based on the company’s preliminary prospectus. SenseTime was valued at $12 billion in a pre-IPO funding round toward the end of last year, according to local media reports and a person familiar with the matter.
The company, based in both Shanghai and Hong Kong, declined to comment on Tang’s wealth. It hasn’t specified a listing timeline or the size of the deal. Reuters has previously reported that SenseTime was aiming to raise up to $2 billion.
The company was added to a U.S. trade blacklist in 2019 and faces restrictions in accessing American supplies and technology. It plans to use about two-thirds of any future proceeds for research and development, according to the prospectus. Last year, SenseTime generated 3.5 billion yuan ($533 million) in revenue from selling its AI, computer vision and data processing software, marking a 14% jump from 2019. The company’s net loss widened to 12.2 billion yuan, which included fair value changes of its preferred shares.
Tang, who continues to teach courses such as image processing and signal analysis at the Chinese University of Hong Kong, cofounded SenseTime in 2014 with two of his Ph.D. students, Xu Li and Xu Bing. Today he is responsible for the company’s research strategies while Chief Executive Xu Li, 39, oversees daily operations. Cofounder and executive director Xu Bing, 31, is in charge of fundraising and strategic investments. Tang’s brother-in-law Wang Xiaogang also sits on the board, and supervises the company’s research team, the prospectus shows.
SenseTime, in the meantime, has benefitted from China’s widening use of AI. Last year, it generated 40% of its sales from government-related sectors, which deployed its software for purposes such as monitoring traffic and the condition of public facilities, as well as detecting whether people are wearing masks as required. In the first half of this year, the percentage increased further to 48%.
But the company warned that it faces uncertainties from the government’s new data privacy laws, which was first announced in August and will take effect starting from November. “…Such regulatory requirements on data privacy are constantly evolving and can be subject to varying interpretations, or significant changes, resulting in uncertainties about the scope of our responsibilities in that regard,” it writes in the prospectus.