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SenseTime aims to be next Google in AI

SenseTime the most valuable AI startup in China is risking backlash amid tech cold war

When he told the MIT crowd last year what they thought about when he said “AI”, “Yeah, it’s SenseTime,” Tang Xiao’ou chuckled softly, despite the apparent response being Google the Chinese artificial intelligence company’s founder half-joked. Perhaps one day, it may not seem like a joke at all.

“Tang told me that his vision is to make SenseTime as big as Google,” Jeff Shi, president of the Asia-Pacific company, told the Asian Review of Nikkei.

To do this, the company known for its tracking software extends outside China and into new technologies, such as self-driving cars. “We want to be an international player, so we have to be an international player,” said Shi.

Nonetheless, the technological transition is taking place as Chinese technology companies like Huawei Technologies, ZTE and others face scrutiny in the US as potential attempts to spy. SenseTime would likely not escape from the glare of this spotlight, warn experts, because of its alleged position in China’s massive surveillance state and its status as a member of the Beijing AI ‘ national team.’

The question is whether SenseTime will escape a backlash in the Huawei style to achieve Tang’s ambition. Some investors have a lot of money to react.

Since it was blown out of the digital laboratory of the Chinese University of Hong Kong in 2014, the company’s value has risen to $4.5 billion. The most recent confirmed round of funding from SenseTime raised $620 million in May 2018, taking its total contribution to $1.6 billion. That list of investors includes Alibaba Group Holding in China, Temasek in Singapore, Fidelity International in the United Kingdom and the US chipmaker Qualcomm’s venture capital arm.

All this began with the development of an algorithm in 2014, in which faces are defined with 98.52 per cent accuracy. This was not just the top of every other available algorithm; it was the first to surpass the human eyes ‘ ability. “To punch we beat Facebook,” Tang said in his speech at the Technology Institute in Massachusetts where he received his computer vision doctorate in 1996.

The innovation-led the US investment fund IDG to provide the initial funding of “tens of millions of dollars” in August 2014. One of the earliest customers was state-run wireless company China Mobile, whose national identity had to be checked by hundreds of millions of users, as mandated by the Chinese security legislation.

Five years later, the race escalates as cash flows into AI. In the US late last year, Chinese rival YiTu beat SenseTime’s facial recognition algorithms in detailed trials. National Standards and Technology Institute. Nonetheless, Jeffrey Ding, a researcher at Oxford University’s Center for AI Governance, emphasised that YiTu was the only one to have solved SenseTime.

“Facial recognition technology from SenseTime is world-class,” Ding said.

The organisation is committed to spreading this innovation. SenseTime announced plans for an Abu Dhabi R&D centre last month. It followed a series of revolutions abroad in the previous year. The company opened a “good health” laboratory in the United States to conduct work on AI-driven diagnosis of cancer. It built an autonomous driving test centre for Honda Motor in Japan. And Malaysia agreed to help develop an’ AI Park’ for $1 billion, creating supercomputing technology and human expertise.

All in all, SenseTime has more than 700 clients. “While the software of SenseTime is mostly used in Chinese companies, it has customers outside China,” said Ding referring to Honda.

According to Lao Shihong, CEO of the company’s Japan division, SenseTime wants to develop Honda’s self-driving cars and sell them internationally. Lao said that the dream varies from Google or Uber Technologies. “We aim to build robot taxis. They want to make the ordinary car owners more accessible,” Shi said in five to 10 years. The corporation is pursuing engineering in the meantime to make regular cars safer.

SenseTime’s stand featured a vehicle simulator with a small camera behind the steering wheel on a car technology trade show in the Japanese city of Nagoya in mid-July. The camera defines the age and gender of the driver and tracks his face and movements for signs of distress or exhaustion. A screen shows a warning if the driver looks slow, talks or lights up a cigarette on the phone.

Shi said the company is in talks with some 20 major car manufacturers. “They are large names in Germany, Japan, the USA and, of course, China, which together constitute 90% of the world’s output,” he said.

For now, face recognition remains the money-spinner of SenseTime. Shi named mobile systems one of the’ most profitable product lines.’ “We provide all major Android smartphone manufacturers global deep learning algorithms,” he said. The private start-up does not reveal its sales, but Shi said for 2017 and 2018 it has turned a profit, with three-digit compound annual growth over the last three years. The organisation refused to comment or plan to make public comments on its ownership structure.

IDC forecasts AI investments alone in the Asia-Pacific region, including Japan, is expected to almost triple from 5.5 billion dollars this year to $15 billion in 2022.

The software of SenseTime appeals to Beijing as much as it appeals to companies. It provides a suite of capable security devices for’ smart cities’ that can help capture offenders— and track people technologically. Surveillance is “one of China’s main business lines,” Shi said, adding “we don’t do much outside of the country.” Ding said it was “challenging to tell how much SenseTime relies on government agreements, but noted that Xu Li, co-founder and CEO of Tang’s, had put a 30 per cent” economic “customer ratio in Quartz’s study last year.

Beijing last September selected SenseTime for its national AI team, together with Baidu, Alibaba and Tencent Holdings online and iFlytek, the voice recognition specialist. This does not guarantee the superiority of SenseTime but can give it “a long-term advantage” when it comes to setting standards.

The link to Beijing was a blessing.

“The government has signalised their confidence in SenseTime as a big AI player by having access to large amounts of information,” said Timothy Heath, Rand Corp’s senior International Defense Researcher. “For AI, more data improves the possibilities of better algorithms, and the Chinese government has more than anyone’s access to data.”

Heath warned, however, that “SenseTime is vulnerable to the same form of claim against Huawei made by the U.S..” In May, media reports came out that President Donald Trump’s administration is considering black-listed five Chinese surveillance firms, though SenseTime was not one of them.

“I assume there’s a threat,” said Amy Lehr of Washington Center for Strategic and International Studies. It also proposed that reports of the comprehensive monitoring of the Chinese government on minorities in the Xinjiang region “have reputational consequences for them.” The company appears to be aware of the issue of the photo. The Financial Times announced in April that SenseTime sold its 51 per cent stake in a joint venture for capable police forces in Xinjiang, where Uighur Muslims were held in mass detention. “To leave Xinjiang was a step in the right direction,” Lehr said. The company was quoted as saying the move was for SenseTime’s growth. “But they have no choice but to work closely with the Chinese government.” Likewise, Rand’s Heath said the retirement would not end the role that SenseTime plays in “enabling” government practices.

Reached for comments on August 8, SenseTime Speaking Officer stated that the company “conserves the relevant news and announcements” regarding the tension between the USA and China and “has always committed to the responsible use of AI technology.” “We adhere to all relevant laws and regulations in the jurisdictions in which we operate,” said the SenseTime Speaker.

Some contend that government transactions should not devalue SenseTime’s contributions.

A source with a corporation from the U.S. that is familiar with the start-up says: “SenseTime is not mysterious or anybody else. SenseTime is a typical AI Corporation, and I would say it’s a group of brilliant talent. Perhaps because I am a Chinese, I am accustomed to every company that has government ties” The foundress remains towering: AI developers are hoping to join Tang’s CUHK laboratory, according to a student who described the professor as’ sweet’ but also’ strict.’ See Japan’s Google-backed AI groundbreaking plots of the Chinese Pony Quantum Race Google to deliver driverless cars to the Tang masses. “There are several of his[ former] students who operate a business. We work with them.” While SenseTime’s limited autonomous driving expertise was criticised by the source in the U.S. organisation, saying they “prefer[ to work with] someone with a better understanding of the automotive industry,” WeRide hopes for its new partner.

Hua admitted that the industry has a “great technology barrier,” but SenseTime said that it “really understands AI.”

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