In the domestic artificial intelligence industry, the four companies of SenseTime, Yuncong, Kuangshi and Yitu are called the FOUR LITTLE DRAGONs of AI, but in fact, the volume of SenseTime has far exceeded the other three.
According to public data, SenseTime's revenue not only ranks first among the 4 xiaolongs, but also more than doubles that of the second xiaolong. In terms of revenue in 2020, SenseTime is already the largest SUPPLIER of AI technology in Asia.
SenseTime and its affiliates have more than 6,000 patent applications, of which more than 87% belong to invention patents, in the past 6 years, it has experienced 12 rounds of financing, the cumulative financing scale of 38 billion, the investors behind it also belong to the all-star lineup, investors include IDG, SoftBank, Ali, Temasek, Tiger Fund, Dinghui, etc., if the IPO is successful, although it is not the first stock of artificial intelligence, but in terms of scale, or can also rank first in the global artificial intelligence industry.
Whether it is the technical strength or the background of investors are very dazzling, but the prospects of SenseTime are still worrying, its losses in the past 3 years have reached 12.8 billion, and it is still far from achieving profitability, so why is it so difficult to make money on artificial intelligence?
<h1 class="pgc-h-arrow-right" data-track="3" > what ARTIFICIAL makes money on</h1>
SenseTime's business can be divided into four main blocks: smart city, smart business, smart life and smart car.
At present, smart cities have the largest revenue, contributing nearly half of SenseTime's revenue in the first half of this year, including subways in many cities, national satellite meteorological centers and even traffic law enforcement in cities.
For example, with the help of SenseTime's mature computer vision technology, it can accurately identify whether the driver is wearing a seat belt or playing with a mobile phone, or whether the bicycle electric vehicle in the city is parked illegally, and warn of the blockage of key channels.
In terms of smart business, AI can replace some manual inspections in the business area, as well as detect whether the facilities or equipment are operating normally, and notify the managers in time when abnormalities occur, which can help enterprises significantly reduce labor costs. For another example, the office system built by SenseTime can manage visitors, passes, meetings, etc. in the building more efficiently, and even an elevator can be equipped with functions such as intelligent reservation, intelligent elevator, face recognition, etc., and all the facilities in the building can be interconnected.
In addition, the current hottest smart car SenseTime also has a large number of layouts, and its artificial intelligence technology can be applied to multiple scenarios in the driving process of the car, making automatic driving more safe and efficient.
<h1 class="pgc-h-arrow-right" data-track="5" > why ARTIFICIAL intelligence is hard to make money</h1>
SenseTime's huge loss comes from the high investment in research and development, as a purely technology-driven company, in the first half of this year, research and development expenses even exceeded its revenue in the same period.
From the beginning of 2018 to the first half of this year, SenseTime paid a total of nearly 4.5 billion yuan in compensation for R&D personnel, higher than the sum of Kuangshi, Yitu and Yuncong. As of the end of June this year, SenseTime's R&D team, including professors and technicians, numbered more than 3,600 people, including more than 250 phDs and associate phDs.
In addition to the huge salary to attract talents to join, in order to build a supercomputing center, develop AI chips and related sensors, a huge investment in research and development is required. Higher hardware purchase expenses also reduce the company's profit margins.
Although SenseTime has strong technical strength, but the revenue method is not much, at present, it can only obtain software technology license fees and subscription fees from downstream government and enterprise customers, because the application scenarios required by customers are not the same, for each customer, it is necessary to develop related technologies in a targeted manner, which will also increase research and development costs.
It can be seen that the huge R&D costs and procurement costs are the main reasons for reducing SenseTime's profit margins.
<h1 class="pgc-h-arrow-right" data-track="7" > senseTime's operational risks</h1>
As a listed company, the risks it faces should also be of concern to investors, first of all, nearly 60% of SenseTime's revenue comes from the largest 5 customers, and the high concentration of customers may reduce its bargaining power, and the loss of any major customer will cause a significant reduction in revenue.
SenseTime is still in a non-optimistic international environment, ranked above the U.S. entity list, not only constrained by the international business card, if the future in the key technology to achieve breakthroughs, may face the United States more severe suppression. At present, many of SenseTime's server hardware needs to be purchased from abroad, and if the future is really restricted, it will have a considerable impact on the company's normal research and development.
At the same time, the continuous development in the field of AI is far more than SenseTime, from the traditional BAT to the emerging Internet giants, they also attach great importance to AI technology, and will compete and compete head-on with SenseTime in many fields in the future.
SenseTime is undoubtedly a very good technology company, we are very happy to see the rise of another Chinese technology giant, but for investors, the first concern is its profitability, the huge R & D investment led the company to continue to leap forward in technology, but profitability has not kept up with its technology research and development to run the pace, developing more commercial monetization methods will be the problem that SenseTime needs to face all the time.
This article is original by Lu Chao Shengcai, welcome to pay attention, take you to increase knowledge together!