Chinese artificial intelligence (AI) firm SenseTime is on a fast track to turn a profit thanks to its strategy of spinning off non-core operations as well as support from Beijing, CEO Xu Li said. SenseTime’s 1+X strategy, where “1” refers to its core AI business and “X” encompasses other ventures, is paying off as the company’s first-half adjusted loss narrowed by 50% from a year earlier. “The speed of narrowing losses will only accelerate in the second half of this year,” Xu said, adding that if the company took more operations off the balance sheet, “we would be profitable immediately”. He also said “the speed of loss reduction in the second half will not be low”. The company had four key “X” businesses at the end of June: smart auto, healthcare, robotics and retail, and SenseTime plans to make them into independent business entities by encouraging the company’s executives to become “re co-founders”, Xu said. He said the changes, which were put into implementation last year, have inspired the company’s employees.
“Previously SenseTime had to lead them to move forward, now they can lead SenseTime to move forward,” Xu said. “They are put in control of promising businesses and they can go to the market to find external investors.” The Hong Kong-listed company said its first-half adjusted loss narrowed to CNY1.16 billion from CNY2.33 billion a year earlier. Revenue rose 35.6% to CNY2.36 billion for the period. The number of employees fell to 3,206 at the end of June from 4,672 a year earlier. The company’s core operations, particularly its generative AI products and computer vision offerings, are expected to thrive, blessed by the Chinese government’s policy of accelerating AI applications.
According to a policy guideline published by the Chinese government in late August, the coverage ratio of “new generation intelligent devices and agents” has to exceed 70% in technology, industry, consumer, welfare, governance and global cooperation. Xu said the message is clear that the country will roll out AI-powered devices for all walks of life and the proliferation of AI devices will benefit businesses like SenseTime. In addition to smartphones, cars and servers, SenseTime's AI technologies can be applied to smart devices like glasses, toys, gadgets and robotics. Xu, who co-founded SenseTime with Tang Xiao’ou, the late Chinese University of Hong Kong professor who died in 2023, said SenseTime’s deep knowledge in visual recognition technology gives its multimodal models strong advantages over other models, the South China Morning Post reports.
