SenseTime Group, the Chinese artificial intelligence (AI) firm, witnessed a substantial drop in its stock value following the unexpected death of its co-founder, Tang Xiao’ou. The company’s shares plunged by 18 percent, marking its most significant loss in over a year. Tang’s demise adds to the mounting challenges already faced by SenseTime, including slowing growth and U.S. sanctions.
In an announcement, SenseTime revealed that co-founder Tang Xiao’ou had passed away on December 16, 2023, following an illness. Tang, born in 1968 and a Massachusetts Institute of Technology graduate, was a respected figure in China’s AI sector. His contributions helped establish SenseTime as one of the nation’s leaders in computer vision technology.
News of Tang’s death immediately impacted SenseTime’s stock performance. On December 18, 2023, the company’s stock slid by 18 percent, representing the most significant single-day loss since July 2022. The unexpected loss of a key figure within the company spooked investors.
Tang Xiao’ou held a substantial 21 percent stake in SenseTime, as the firm’s 2022 annual report reported. This made him one of the major shareholders in the company. According to the Bloomberg Billionaires Index, Tang’s net worth stood at US$1.1 billion before passing.
Challenges faced by SenseTime
SenseTime has grappled with challenges that have hindered its growth and stability. The U.S. government had previously blacklisted the company in 2019, citing allegations related to human rights violations in Xinjiang. This action severely restricted SenseTime’s access to capital and essential U.S. tech components.
Furthermore, recent months have seen additional obstacles, such as new restrictions on selling advanced AI chips and chipmaking equipment to Chinese firms. These developments have further compounded the company’s difficulties.
SenseTime’s troubles didn’t stop there. The company faced allegations of inflating revenues raised by the short-seller Grizzly Research. SenseTime swiftly denied these accusations. The controversy added another layer of uncertainty surrounding the company’s financial health.
Before the latest drop, SenseTime’s stock had been trading at HK$1.26, less than a third of its listing price. While the stock did regain some of its losses on Monday, it was still trading approximately 11 percent lower than its previous levels.
Tang Xiao’ou’s sudden death sent shockwaves through SenseTime Group, significantly dropping the company’s stock value. This unfortunate event comes at a challenging time for the Chinese AI firm, which has been grappling with a slowdown in growth, U.S. sanctions, and allegations of financial misconduct.
Investors will be closely monitoring SenseTime’s ability to navigate these challenges and maintain its position in the highly competitive AI sector. The company’s prospects hang in the balance as it seeks to overcome the obstacles that have cast a shadow over its recent performance.