Deep Glint debuts Shanghai trading to fuel further facial recognition development
Chinese facial recognition developer Deep Glint started trading for the first time on the Shanghai stock exchange last week as it hopes to gain more investor confidence and make more profit from the sale of its technology, reports South China Morning Post.
The artificial intelligence-based face biometrics provider, which was sanctioned last year by the U.S. government, recorded a market capitalization of $1 billion, with shares opening at RMB 38 (approximately US$5.98), but saw a drop in its share price by 12 percent in 48 hours after its debut.
China Knowledge reports the company says in its prospectus that it plans to use the funding to further refining its facial recognition platform, and for working capital.
SCMP notes that Deep Glint was once hoping for a $300 billion valuation, but is operating on a net loss and prospects for the company to gain more profits appear slim as concerns grow about lack of investor confidence in the potential of Chinese artificial intelligence technologies. Deep Glint has had investor funding support from U.S investors in the past.
Speaking on the issue of investor confidence, Zhang Yi, a facial recognition specialist and chief executive at Shenzhen-based iiMedia Research, was quoted by the SCMP as saying “Investors will keep a prudent attitude before the company achieves a breakthrough that can fix the ‘choke point’ in the industry.”
Despite projections that the U.S. will likely be overtaken by China in AI, companies like Deep Glint will have to deliver strong investment returns, notes SCMP. But this, for now, looks very unlikely, according to Zhang Yi, as DeepGlint spends most of its profits on research and development.
Figures from Deep Glint cited by SCMP reveal that between 2018 and 2020, it spent about 283 million yuan (approximately US$44.56 million) on R&D, representing about 77 percent of the company’s total revenue for the period.
Stock in SenseTime, which like Deep Glint has been consistently among the accuracy leaders in NIST’s facial recognition testing, has risen in price since an IPO that represented a climb-down from lofty prior ambitions.
Also similar to SenseTime, the Chinese government is the biggest business partner of Deep Glint, and the company has benefitted in the past from support which the government gives to firms that provide services considered important for Beijing.