(Bloomberg) — SenseTime Group Inc. plunged its most in more than a year after its co-founder’s surprise death spooked investors already grappling with the fallout from slowing growth and US sanctions.
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The Chinese AI firm slid as much as 18% in Hong Kong on Monday, the biggest loss since July 2022.
SenseTime disclosed that co-founder and major shareholder Tang Xiao’ou died on Friday after an illness. Born in 1968, the Massachusetts Institute of Technology graduate and Hong Kong professor was regarded as a pioneer in China’s AI sector, helping create one of the nation’s leaders in computer vision.
His company, earlier backed by Alibaba Group Holding Ltd., listed in Hong Kong in one of the most highly anticipated debuts of 2021. Tang had a 21% stake in SenseTime, according to the firm’s 2022 annual report. His net worth last stood at $1.1 billion, the Bloomberg Billionaires Index shows.
Read More: SenseTime Said to Mull Raising Fund for Auto, Health Care Units
The Chinese firm’s growth however has slowed dramatically in the face of rapidly intensifying competition. The US government blacklisted the company in 2019 on allegations related to human rights violations in Xinjiang. That restricted its access to capital and crucial US tech components, compounded in recent months by new curbs on the sale of advanced AI chips and chipmaking equipment to Chinese firms.
Its shares have fallen in recent weeks after short-seller Grizzly Research accused the firm of inflating revenues, which SenseTime has denied. Before Monday, the stock traded at HK$1.26 — less than a third of its listing price. The stock regained some of its losses Monday morning and traded about 11% lower.
SenseTime’s focus this year turned from its traditional strengths in facial recognition to generative AI. It was among the first Chinese tech firms to receive government approval to publicly roll out ChatGPT-like services.
China’s AI arena has experienced an influx of capital and talent. But the rivalry is fierce as startups and big companies from Baidu Inc. to SenseTime compete to develop their own solutions. SenseTime was considering raising funds and carving out its autonomous driving and health care units, Bloomberg News reported this month.
In its statement, SenseTime did not specify Tang’s illness.
“The spirit and achievements of Prof. Tang will live on. The directors and all employees of the company are committed to completing his mission, never forgetting the company’s original aspiration, and forging ahead,” it said.
Read More: Chinese AI Firm SenseTime Dives After Short-Seller Takes Aim
(Updates with share action from the second paragraph)
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