Right after the introduction of a fresh model of its SenseNova generative AI, SenseTime witnessed an extreme jump in its stock. This also speaks volumes regarding China’s inclination towards the development of artificial intelligence.
The shares rose to a high of 36% while the Tech Day event was being celebrated in Shanghai. SenseNova 5.0 is akin to the ChatGPT platform. There is a remarkable enhancement in the potential for language and creativity, as shared by the Chairman, Xu Li. Following the jump, all trading activities about the stock were halted.
SenseTime belongs to a list of emerging Chinese businesses and startups scouring avenues for building a solution related to OpenAI’s ChatGPT. In 2023, the company partnered with Baidu Inc. and the Alibaba Group Holding Ltd to create its in-house generative AI platform. This technology is being aggressively promoted by Beijing, reaching out to domestic businesses to try and lead the way, taking over from similar US initiatives.
SenseTime’s rally could be due to a lowered evaluation. There was a time when the company had experienced a real high in the AI sector in China. However, it has lost 80% of its market value following a 2021 IPO. This is after the US put sanctions on the company, similar to the Huawei Technologies Co scenario. Additionally, investors were disturbed by the untimely passing away of a co-founder in 2023.
According to the managing director of Union Bancaire Privee, Vey-Sem Ling, there is no real reason for such an occurrence. Still, it may be due to less anticipation and the overselling of stock. In his opinion, there is no real basis to work upon.
SenseTime’s AI module’s potential in creating text and imagery content is like OpenAI’s Sora.
There was a time when SenseTime was known as a top business in the field of AI-boosted facial identification. It soon got involved in generative AI, following applications from ChatGPT to Sora, which activated the technology space globally. It was responsible for introducing the initial SenseNova in April 2023 and received government consent to introduce its solutions publicly.
The company is attempting to hold on to its position despite a highly competitive environment. It was blacklisted by the US in 2019 for human rights violations in Xinjiang. Its capital was blocked, along with access to required US tech parts. Added to that was the red flag for selling new-age AI chips and chip-creating mechanisms to China-based businesses. There was also an accusation against the company for falsely increasing revenue figures, a fact they did not accept.
Short interest was responsible for over 10% of SenseTime’s free-floating shares, witnessing an extreme decline.
In the words of a Director at Chanson & Co., Shen Meng, China is trying its best to promote AI, but it comes with certain bottlenecks which need to be addressed.
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