Chinese AI firm SenseTime denies research firm Grizzly's claim it inflated its revenue
SenseTime, a major Chinese artificial intelligence company known for its facial recognition technology, has rejected claims by a research company that it has inflated its revenue
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.SenseTime, a major Chinese artificial intelligence company, has rejected claims by a research company that it has falsely inflated its revenue.
“(SenseTime) believes the report is without merit and contains unfounded allegations and misleading conclusions and interpretations,” the company said in a notice Tuesday to Hong Kong's stock exchange, after its stocks tumbled nearly 10% following the report's release by short-seller Grizzly Research LLC.
“It also shows a lack of understanding of the company’s business model and financial reporting structure, and a lack of thorough reading of the company’s public filings,” SenseTime said.
The company said it was reviewing the allegations and “considering the appropriate course of action to take to safeguard the interests of all shareholders.”
SenseTime is known for its facial recognition technology. It launched a ChatGPT-style chatbot to the public in August.
Grizzly's report alleges that SenseTime uses revenue fabrication schemes to inflate its sales data. It also said SenseTime was controlling several entities that it has not disclosed on its balance sheet, suggesting the publicly listed company is not as transparent about its business as it should be.
In its statement, SenseTime also responded that Grizzly did not understand its business model.
Reports by short-selling research companies like Grizzly usually focus on corruption or fraud in the business world, such as accounting irregularities and bad actors in management. The short-sellers make “short” bets against those targets, enabling them to make money when their share prices fall.
SenseTime’s Hong Kong-traded stock sank as much as 9.7% early Tuesday but recovered some lost ground and closed 4.9% lower.
SenseTime was blacklisted by the U.S. government in 2019 over allegations that its facial recognition technology has been used to oppress members of the mostly Muslim Uyghur minority in China’s northwestern Xinjiang region.
In July, Alibaba, one of its prominent backers, cut its stake in SenseTime to 3.15% from 5.29%. Japan’s SoftBank Group, also a SenseTime backer, has also sold off significant holdings in the company.