The Chinese artificial intelligence startup said on Monday it would delay its much-anticipated IPO in Hong Kong, where it had planned to raise up to $ 767 million. It was to start negotiating this week.
The US Treasury Department on Friday placed the company on a list of “Chinese Military-Industrial Complex Companies” in which US President Joe Biden has banned Americans from investing.
The US Treasury said SenseTime had been sanctioned over the role its technology plays in potentially human rights abuses against Uyghurs and other Muslim minorities in Xinjiang – accusations SenseTime has strongly denied.
Investors in Hong Kong who had previously applied to participate in the IPO will receive refunds, he added.
SenseTime said it “remains committed to completing the package and the list soon.” He said on Monday he would issue an updated prospectus for investors, with a new timeline expected.
SenseTime, which was founded in 2014 in Hong Kong, generates hundreds of millions of dollars in revenue a year by deploying technology for everything from smart city systems to driverless vehicles.
But the firm is best known for its facial recognition software.
Around this time, the US government also raised concerns about the western Chinese region of Xinjiang and the ties facial recognition software companies like SenseTime had with the region.
Although the use of this technology in policing and internal security is widespread throughout China, it is particularly prevalent in Xinjiang, where up to 2 million people belonging to Uyghurs and others Muslim ethnic minorities were reportedly placed in internment camps, according to the US State Department. .
Beijing maintains that the camps are vocational training centers that help de-radicalize citizens. But Uyghur exiles have called the crackdown a “cultural genocide”, with former detainees claiming to have been brainwashed and ill-treated.
Announcing the new restrictions on Friday, the US Treasury Department again raised concerns about potential human rights violations in the region. The government said that SenseTime’s subsidiary in Shenzhen had “Developed facial recognition programs that can determine the ethnicity of a target, with particular emphasis on identifying ethnic Uyghurs.”
SenseTime rebuffed the allegations on Saturday, saying “we strongly oppose the designation and the accusations that have been leveled against it.”
“The accusations are unfounded and reflect a fundamental misunderstanding of our business,” he added. “We regret being caught in the midst of geopolitical disputes.”
The firm also pledged to “take the appropriate measures to protect the interests of our company and our stakeholders”, without further clarification. He declined to comment when asked for details.
SenseTime added in its weekend statement that it operates “as a software company committed to promoting sustainable, responsible and ethical use of AI,” which has “complied with applicable laws and regulations … in the jurisdictions where we do business “.
The company said it has formed an “AI Ethics Council, made up of internal and external experts, [which] ensures that our company strictly adheres to recognized ethical principles and standards. “
Last week, SenseTime planned to price the shares at between 3.85 and 3.99 Hong Kong dollars, or about 50 cents a piece, according to a stock market file. That would have put its valuation at around $ 17 billion in the upper range.
Prior to the postponement, the company was scheduled to begin operations in Hong Kong on December 17.
– Brian Fung and Ben Westcott contributed to this report.