SenseTime co-founder dies, casting shadow over Chinese facial recognition giant

The billionaire founder of Chinese AI company SenseTime, Tang Xiao’ou, died last Friday due to health issues, the firm said in a statement.

SenseTime is known as one of China’s “four little dragons” of AI, along with fellow facial recognition-providers Cloudwalk Technology, Megvii and Yitu. SenseTime’s shares plunged as much as 18.25 percent to an all-time low on Monday morning, before narrowing losses to about 11 percent as the session closed, Hong Kong’s state broadcaster RTHK reports.

The obituary posted by the company did not specify the type of health issues Tang was facing.

“It is with great sorrow that we announce the passing of Professor Tang Xiao’ou, our beloved founder, a renowned artificial intelligence (AI) scientist, director of Pujiang Lab, director of Shanghai AI Lab, and Professor of The Chinese University of Hong Kong. Professor Tang passed away due to health issues on December 15, 2023, at 11:45 p.m.,” SenseTime wrote.

Tang launched the company in 2014 during his time at the Chinese University of Hong Kong (CUHK) where he researched computer vision, pattern recognition and video processing. Its other co-founders include Xu Li, the company’s current CEO, and Wang Xiaogang, executive director and chief scientist.

Known for its facial recognition technology, SenseTime became the world’s most valuable private AI startup after a funding round in 2019 which drew in investors such as Chinese e-commerce giant Alibaba Group. The company went public with a $767 million IPO in Hong Kong in December 2021.

The firm was not without controversy. The U.S. Commerce Department placed the partly state-owned company on its Entity List in 2019 for its alleged role in human rights abuses in China’s region of Xinjiang, stymying its growth in Western markets. SenseTime has also been facing a shrinking facial recognition surveillance market in China and has been trying to develop alternative sources of income.

The company has lost nearly two-thirds of its price since its shares were listed in 2021. Prominent investors such as Alibaba and Japanese conglomerate Softbank have been selling their shares in the firm.

Tang’s death comes just weeks after U.S.-based short-seller Grizzly Research accused the firm of fabricating its revenue. Among other issues, the report describes an alleged practice of SenseTime to invest in other companies in return for purchase agreements in which money comes back to SenseTime “without real delivery of product.”

SenseTime responded that the report is “without merit” and that the allegations are unfounded. Despite the denial, SenseTime’s stocks have suffered, Forbes reports. According to the outlet, Tang had a net worth of US$1.1 billion at the time of his death, made up entirely of the value of his shares in SenseTime.

The co-founder was the company’s largest shareholder, holding 20.63 percent of the company with 68.28 percent of its voting rights, per The South China Morning Post. He received his master’s degree from the University of Rochester in 1991 and a Ph.D. from the Massachusetts Institute of Technology (MIT) in 1996. Tang worked as the group manager of the Visual Computing Group at Microsoft Research Asia from 2005 to 2008.

Article Topics

AI  |  biometrics  |  China  |  facial recognition  |  SenseTime