Eight years after its establishment, SenseTime has finally crossed the threshold of an IPO.
On December 30, 2021, SenseTime officially registered on the Hong Kong Stock Exchange and became the first domestic AI (artificial intelligence) stock. Subsequently, SenseTime's stock price rose all the way, soaring from a price of HK$3.85 to a sharp rise of 33% and 41% on the second and third days, in stark contrast to the situation in which nearly half of Hong Kong new stocks broke.
Previously, how to output high-performance AI products at scale and at low cost has become the core problem that all AI enterprises need to solve. At present, SenseTime has found the best solution to this problem. According to Sullivan's report, SenseTime is the largest supplier of artificial intelligence software in Asia and the largest supplier of computer vision software in China in terms of revenue in 2020.
In his listing speech, SenseTime Chairman and CEO Xu Li also said that since the word "artificial intelligence" was first proposed, today, artificial intelligence has become the infrastructure of the times. With the help of AI computing power large devices and big data technology breakthroughs, artificial intelligence is accelerating the expansion of human cognitive boundaries for the vast world.
Shenwan Hongyuan analyst Liu Yang recently issued a research report and pointed out that AI is expected to accelerate in 2022, and mature AI application scenarios such as intelligent manufacturing, smart warehousing and logistics, and smart finance are emerging. Coupled with national policy support, the opening of the AI unicorn listing tide and other factors, in the post-demographic dividend era, AI is expected to become a high-prosperity track for more than a decade.
Going public is just a solid step towards the launch of SenseTime
In 2014, on the eve of the breakthrough of the industrialization red line in the visual field, the face recognition technology developed by the founding team of SenseTime surpassed the accuracy of the human eye for the first time and achieved a breakthrough in the red line of industrial application, which also became the starting point of the establishment of SenseTime.
In Xu Li's view, breaking through the red line of the industrial world can make revolutionary changes in the efficiency of many industries. SenseTime's artificial intelligence technology has surpassed the human level in many vertical fields, driven industrial upgrading, turned the red ocean into a blue ocean, and successfully helped many industrial tracks to upgrade to high-end competition.
Fast forward 8 years, from the submission of the application in August 2021 to the listing hearing in November, SenseTime's IPO journey has gone relatively smoothly. However, on December 10, due to the sudden ban in the United States, SenseTime had to re-offer shares.
Fortunately, the good things are more grinding, the updated cornerstone investor lineup is stronger, and the cornerstone investment scale has increased to $510 million earlier. After the listing, the performance of SenseTime has proved the unique vision of cornerstone investors with strong facts.
In addition, including investors such as Primavera Capital, Silver Lake Capital, IDG Capital, China State-Owned Enterprise Structural Adjustment Fund, Shanghai International Group, Sailing and CDH, all pre-IPO investors committed to locking all their shares for 6 months, firmly optimistic about the long-term value of SenseTime.
Songhe Capital also invested in SenseTime in 2017, talking about investment in SenseTime, Li Wei, founding partner of SenseTime, said that at the beginning of SenseTime's establishment, AI was not very concerned, and in just a few years, the changes of artificial intelligence to various industries have been fully rolled out. SenseTime is one of the most innovative artificial intelligence enterprises in China, and its R&D capabilities have been globally recognized.
Zhongtai Securities also believes that SenseTime has two major elements for success in the artificial intelligence track, one is to continuously solve the coverage of long-tail scenarios and move closer to true industrialization; the other is the large-scale mass production of AI models, reducing costs and increasing efficiency, and commercialization can be landed. In addition, from the very beginning, SenseTime has invested in talents, and the competitiveness of the talent echelon is the most important weight in the long-term competitive game.
The listing of SenseTime in Hong Kong is also a process for the market to recognize SenseTime.
In the artificial intelligence track, which investors are still highly concerned about, there are also some misreadings in the market's previous cognition of SenseTime, which is an artificial intelligence platform company, not just a security and face recognition company. The IPO is also just the first step for SenseTime to reach the market.
SenseTime has used its own actual data to prove that at present, artificial intelligence has gone through the first stage of technology commercialization, that is, breaking through the "industrial red line" and making technology practical. The next stage is to achieve "large-scale production" and let AI truly change all walks of life.
There is no doubt that nowadays, compared with the previous Internet companies, today's hard technology companies are competing for their technical strength, talent strength, and commercial landing ability, and in these aspects, this listing, SenseTime has successfully withstood the test of the market.
"When we see a huge breakthrough in technology, SenseTime hopes to promote the landing of technology, use technological breakthroughs to redefine scenarios and models, and refresh the public's understanding of artificial intelligence." We always believe that the incremental value brought by the transformation of artificial intelligence technology will surely promote the advent of an intelligent era of inclusiveness and fairness. Xu Li said.
The hard power behind SenseCore's AI device
In May 2017, at sensetime's first executive meeting, Xu Li proposed that SenseTime's mission should be to "let artificial intelligence lead human progress", hoping that this is the meaning of SenseTime's existence. Tang Xiaoou added four words before this sentence, "insist on originality", not only in the laboratory, but also in the industry.
To this end, Xu Li also mentioned in an interview earlier, "Before and after the establishment of the company, the key point we did at that stage was to recruit graduate students and doctoral students in this direction that could be found in the circle, and all gathered together to form a large talent circle." ”
In terms of talents, SenseTime has 40 professors and more than 5,000 employees, of which about two-thirds are scientists and engineers, including more than 250 doctoral and doctoral candidates; in terms of academic research, the company has won more than 70 global competition championships, published more than 600 top academic papers, and has more than 8,000 artificial intelligence patents and patent applications, ranking leading the industry.
Of course, as we all know, the current artificial intelligence technology really can't produce huge revenue and profit scales as quickly as the Internet. The investment in technology research and development is very large. So, why should SenseTime invest such a large scale in such a number of directions, in fact, SenseTime adheres to the real long-term thinking to create its own competitive moat, and even invests tens of billions of research and development costs.
In July 2021, SenseTime officially launched the original new artificial intelligence infrastructure SenseCore SenseTime AI device at the World Artificial Intelligence Conference (WAIC).
The essence of the AI large device is to let the AI land out of the manpower-intensive state. The reason why AI is labor-intensive is because the production efficiency is not high, and the key to improving production efficiency is that the cost of production factors can be low enough. This is a sign of SenseTime's core competencies, a moat for the company's continued operations and larger-scale transitions, and a key step in driving the reduction of production factors in the AI era.
In SenseTime's own words, its SenseCore is a new type of artificial intelligence infrastructure, which can reduce the price of artificial intelligence production factors by opening up computing power, algorithms and platforms, and achieve high-efficiency, low-cost, and large-scale AI innovation and landing, thereby opening up the closed loop of commercial value, solving long-tail application problems, and promoting artificial intelligence to enter the stage of industrial development.
The prospectus also shows that by using SenseCore SenseTime's AI device to empower the whole process of artificial intelligence model production, SenseTime's R&D and engineering teams can reduce the development time to hours compared to the industry's time-consuming weeks. In 2019, 2020 and the first half of 2021, SenseTime's R&D staff increased the average number of commercial models produced per person per year from 0.44 to 3.45 and continued to increase to 5.24.
As of June 30, 2021, SenseTime has developed more than 22,000 commercial AI models for different applications, spanning multiple verticals.
SenseTime customers can also preview and integrate growing models and applications through SenseTime's software platform for a standard, code-free experience. The software platform enables SenseTime's business to scale across industries. Relying on the platform-based playing method, SenseTime has also completed the layout of four major business sectors of smart business, smart city, smart life and smart car.
As of June 30, 2021, SenseTime has also strategically established 23 AI supercomputing clusters in key regional markets with more than 20,000 GPUs with a final capacity of 117 billion floating-point operations per second, and a new Artificial Intelligence Computing Center (AIDC) in Lingang, Shanghai, with a maximum computing power of 374 billion floating-point operations per second to fully support SenseCore's model production.
With AI large devices as the cornerstone, SenseTime is evolving from a hard technology company to a hard technology platform company. Through a solid platform, SenseTime has freed AI from the manpower-intensive state, so as to carry out a wide layout in various industry tracks, while the demand for personnel is lower, but it can get more innovative technological achievements, and can quickly commercialize these innovative technological achievements.
Essence Securities also said that AI application scenarios have increased rapidly, and scale has become the key to industry competition. At present, the underlying technology and algorithm of the artificial intelligence industry have basically matured, and the key to restricting the development of the industry lies in the deep integration with the scene. Driven by 5G technology, the rapid development of the Internet of Things and the industrial Internet, the industry application scenarios will be greatly enriched, providing a huge industry opportunity for manufacturers who can quickly achieve large-scale production.
The grand plan to empower 100 industries is constantly unfolding
Through SenseCore's SENSE-Worth AI device, senseTime is realizing its vision of empowering hundreds of industries. At present, SenseTime's business mainly covers four areas, namely smart business, smart city, smart life and smart car.
As of June 30, 2021, SenseTime had more than 2,400 customers, including about 250 Fortune 500 companies and listed companies, 119 cities, and more than 30 automotive companies. SenseTime has also enabled more than 450 million smartphones and more than 200 mobile apps.
Taking industry as an example, there are many "long tail" scenarios in the industrial industry that have not been solved, such as the safety guarantee for workers, plants, equipment, etc. in the factory, and enterprises will also consider short-term and long-term costs and benefits in the process of digital and intelligent transformation, and will usually give priority to and solve the head application.
But SenseTime's industrial engine can better help solve such "long-tail needs". In the process of train operation, the catenary suspension system is a very important safety link in the operation of the train. Even for the most competent staff, the efficiency ceiling is 2.5 km per person/day, but for the SenseTime model, its efficiency has reached 12.5 km/ h, which is hundreds of times higher than the manual efficiency.
As of June 30, 2021, SenseTime also has more than 30 leading automotive corporate customers at home and abroad. SenseTime has become a supplier of more than 50 vehicle models, and in the next few years, SenseTime can supply shadow products to more than 20 million vehicles.
For example, since 2017, SenseTime has become a strategic partner of Honda Motor, providing it with AI technologies related to autopilot. SenseTime has also launched SenseAuto Robobus, a product based on SenseTime's autonomous driving and AR capabilities, to bus operators.
In addition, SenseTime's strength lies in computer vision technology, and one of the crux of the current metaverse is the need to obtain a more realistic sensory experience in the virtual world through the naked eye. In the prospectus, SenseTime also mentioned that it will launch SenseME and SenseMARS software platforms for smart life.
In September 2020, SenseTime empowered innovative AI+AR technology in Hangzhou's West Lake Scenic Area to create an "AR Tour Route". Tourists on this route can scan the real scene through the mobile APP, you can open the AR navigation tour mode, a glimpse of the surrounding special attractions.
In May 2021, SenseTime and Air Travel Cross-Section landed high-precision AR indoor navigation technology at Changsha Huanghua Airport. When passengers arrive at the airport, they use their mobile phones to open the "Airport AR" special service of the Airline Travel Vertical and Horizontal APP, scan the airport environment, and obtain convenient path guidance services, follow the real-time AR virtual landmarks and signs all the way to the boarding gate.
In the field of hard technology, AI belongs to the sum of technological innovations that connect dots into lines, and its development needs to be promoted by many cutting-edge technologies such as big data and deep learning. The integration of a number of technologies has also promoted the empowerment of AI technology to the real economy. From the perspective of SenseTime's business, AI has indeed achieved commercial landing in multiple scenarios such as travel and public services.
The continuous deepening of the platform has also brought rich market returns to SenseTime. According to IDC's report, in the first half of 2021 Chinese Intelligent Computer Vision Application Market size reached $987 million, of which SenseTime's market share was 20.5%, ranking first.
IDC pointed out, "While maintaining a platform-based strategy, SenseTime deepens its industrial layout and drives stronger growth in the future, and its market share is becoming more and more leading." The layout of the intelligent computing center expands the scale to invest in a new generation of larger-scale computing infrastructure, improves the production capacity of AI algorithms, improves the efficiency of technology landing, and makes it easier for customers to use new AI technologies through SaaS and IaaS models. ”
In Xu Li's listing speech, he mentioned, "The long-term heavy investment in research and development, the construction of artificial intelligence infrastructure, the layout of the computing power platform and our mission are closely related. Xu Li said in one sentence that SenseTime adheres to the long-term doctrine in the direction of technological innovation.
Under this long-term goal, the IPO is only the first step for SenseTime to contact the market, and under its solid platform-based play, there are more possibilities worth envisioning in the future.
First there is a sustained large-scale investment in technology to bring innovation, and then there is a business model development, which is a rare road. The hard part is the uncertainty of the business. Artificial intelligence has indeed broken through the "industrial red line" in many industries, which also makes SenseTime more convinced of the inclusive value that technological breakthroughs can bring.
This is also the reason why SenseTime has been able to grow into a leading enterprise in artificial intelligence in Asia in 7 years, using technological breakthroughs to redefine scenarios and models again and again, to refresh the industry and refresh public perception.
In his listing speech, Xu Li expressed his confidence in the entire artificial intelligence industry from time to time. "Today, artificial intelligence has become the infrastructure of the times as a general technology." He stressed that with the help of AI computing power large devices and big data technology breakthroughs, artificial intelligence is accelerating the expansion of human cognitive boundaries for the vast world. (Text/Zhang Lijuan, Source/Touzhong Network)