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Tang Xiao’ou will become one of the richest people in the world after a list of controversial technology companies.
A few weeks after the US put a unit of SenseTime Group Inc. on the alleged blacklist of alleged human rights violations, the company’s founder Tang Xiao’ou is set to become one of the richest people in the world.
China’s largest artificial intelligence company had its initial public offering worth HK $ 3.85 (49 cents) per share, and raised $ 5.55 billion.
That was the bottom line of the expected stretch, but despite rising tensions with the US and Beijing in cracking down on tech giants, it is a sign that the country, including its vast surveillance machinery, continues to generate high incomes and massive gains for venture capitalists.
Tang, 53, a graduate of the Massachusetts Institute of Technology and a professor of information engineering at the University of China in Hong Kong, owns 21% of the company and is worth $ 3.4 billion, according to the Bloomberg Billionaires Index.
A SenseTime representative declined to comment on Tang’s net worth.
SenseTime was expected to be a successful public offering, but it has caught fire in recent years. He was forced to postpone the list this month after the US complained that the company’s face recognition software was being used in the oppression of Uighur Muslims in the western Xinjiang region of China. SenseTime said the allegations that led to the sentences were baseless.
China’s high-tech unicorn SenseTime is the first foreign offering since Didi Global Inc. launched its giant travel-sharing IPO in New York in July, sparking a regulatory backlash from Beijing officials. The shares will begin trading on December 30 in Hong Kong, giving the company a market value of more than $ 16 billion.
Tang has long been involved in developing the artificial intelligence needed to recognize the face.
He graduated from China University of Science and Technology, then graduated from Rochester University in New York and earned a doctorate from MIT in 1996, where he studied underwater robotics and computer vision.
He worked at Microsoft Research Asia for a number of years and co-founded Shanghai-based SenseTime in 2014 with Xu Li, then a Chinese computer manufacturer at Lenovo Group Ltd. The company attracted early investments from IDG Capital and then received sponsors, among others. SoftBank Group Corp., Alibaba Group Holding Ltd. and Silver Lake.
‘Penalty Factor’
It is currently the largest AI software company in Asia, with a market share of 11%, according to the prospectus. The technology is expanding into a number of areas, including assisting police in China, locating film products, and creating an augmented reality scene in a Tencent Holdings Ltd mobile game.
SenseTime relaunched its IPO process after being blacklisted, with a group of core investors raising their bets to $ 512 million from $ 450 million. These include the state-backed Mixed Property Reform Fund and Shanghai Xuhui Capital Investment Co.
The company later raised a legal opinion on the Hong Kong Stock Exchange that the restrictions did not apply to the parent company of the sanctioned unit. Although the offer remained the same size, retail investors expressed greater caution.
“It makes sense for retail investors looking for short-term gains to be less enthusiastic about the penalty factor,” said Kenny Ng, a strategist at Everbright Sun Hung Kai. “Especially the Hong Kong general stock market has not been doing well lately.”
SenseTime’s revenue rose 14% last year to 3.4 trillion yuan ($ 534 billion), although it still had an operating loss of 1.8 trillion yuan.
“In the initial phase, technology companies need to invest even more in research and development to keep their technology competitive,” Ng said. “For SenseTime, maintaining steady revenue growth is more important than making it profitable in the short term.”
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