SenseTime postpones IPO after being placed on US investment blacklist

SenseTime, a Chinese artificial intelligence giant, announced on Monday that it was postponing its US$767-million IPO in Hong Kong after it was added to a US investment blacklist last week.

SenseTime "remains committed to completing the global offering and the listing soon," said the company, which is expected to be the biggest listed Chinese AI firm after its initial public offering.

Last week, the US Department of the Treasury added SenseTime to an investment blocked list as a "Chinese military-industrial complex company."

SenseTime decided to postpone the IPO to "to safeguard the interests of the potential investors," helping them consider the potential impact. All application money will be refunded in full without interest to all applicants, SenseTime said in a statement to the Hong Kong Stock Exchange.

SenseTime remains committed to completing the global offering and the listing soon and it will release an updated listing schedule soon, the company said.

"The (US) accusations are unfounded and reflect a fundamental misunderstanding. We regret to have been caught in the middle of geopolitical disputes," SenseTime said in a previous statement over the weekend.

As a software company, SenseTime is "committed to promoting the sustainable, responsible and ethical use of AI," it added.

According to early regulatory filings, SenseTime planned to sell 1.5 billion shares at a price range of HK$3.85 (49 US cents) to HK$3.99, allowing it to raise US$767 million through the IPO.

The market size of SenseTime may hit over 100 billion yuan (US$15.7 billion) after its listing, likely higher than Shenzhen-listed AI firm iFlytek with market size of 124 billion yuan on Monday, analysts said.

SenseTime's IPO size had already been trimmed earlier this year from a US$2-billion target, according to media reports.

SenseTime's business, relying on facial recognition algorithms, faces challenges like commercialization, low-threshold entry, as well as ethical and data security issues, industry insiders said.

SenseTime has taken effects to diversify its business recently, expanding talent resources into media and meta-universe sectors, Shanghai Daily learned.