SenseTime, once hailed as one of China’s leading AI companies, is undergoing a significant transformation, pivoting from computer vision to generative AI. This shift was triggered by the global surge in interest surrounding generative AI technologies like ChatGPT, which quickly eclipsed computer vision as the dominant focus in the field.
SenseTime’s latest financial results reveal the progress of this transformation. In the first half of 2024, generative AI accounted for a substantial 60.4% of the company’s total revenue, demonstrating its rapid growth.
However, this shift comes with challenges. SenseTime’s traditional computer vision business, which relied heavily on government spending on surveillance systems, is facing a decline due to slowing economic growth and reduced government investment in security. This is further compounded by U.S. sanctions imposed on the company in 2021, limiting its access to American investors and cutting it off from some advanced technologies.
To navigate these challenges, SenseTime is focusing on two key areas within generative AI:
1.
GPU Rental Services:
The company is acquiring high-performance GPUs, setting up data centers, and leasing computing power to businesses through cloud platforms. This model allows enterprises to access the resources needed to develop and deploy AI applications without the high upfront costs.2.
SenseNova LLM:
SenseTime is developing its own large language model (LLM), SenseNova, which powers a ChatGPT-like chatbot service called SenseChat. While SenseChat is currently free for public use, SenseTime monetizes the technology by offering API services that allow businesses to integrate SenseNova into their applications.SenseTime has achieved some early success in these areas, ranking among the top players in China’s AI data center services and LLM markets. However, the generative AI market in China is still in its early stages, and fierce competition from giants like Baidu and ByteDance, combined with ongoing restrictions on GPU imports, presents significant challenges for SenseTime’s future success.
Despite these obstacles, SenseTime has managed to narrow its losses in the first half of 2024, suggesting that the shift to generative AI is not further exacerbating its financial difficulties. However, the company needs to demonstrate sustained growth and stability in the rapidly evolving generative AI market to regain investor confidence and ultimately thrive in this competitive landscape.
