SenseTime’s GenAI Business Skyrockets By 256% in H1 of 2024

TMTPOST--Chinese artificial intelligence company SenseTime has experienced a revenue surge of over 20% this year, driven by robust growth in its generative AI (GenAI) business, as the decade-old leader in the domestic AI industry strives to turn a profit.

As one of the leading players in artificial intelligence, SenseTime has continued to expand its presence, positioning itself at the forefront of China's burgeoning generative AI sector.

In the six months leading up to June 30, SenseTime's total revenue reached 1.74 billion yuan (about US$244.3 million), reflecting a year-on-year increase of 21.4%.

This impressive surge was largely driven by the company's booming generative AI (GenAI) business, which experienced a remarkable 256% jump from the same period last year, generating 1.05 billion yuan in revenue. GenAI now accounts for 60% of the company’s total revenue, cementing its status as the company’s leading growth engine.

SenseTime’s GenAI portfolio includes a wide range of cutting-edge technologies, from AI data centers to large language models (LLMs). These technologies, which power applications like OpenAI's ChatGPT, have become critical to the company’s success. The significant demand for SenseTime’s LLMs and AI computing infrastructure services in China has been a key factor behind this growth.

Xu Li, the CEO and co-founder of SenseTime, stated earlier this year that the company aims to achieve profitability within the next two years, with GenAI expected to play a central role in driving that growth.

Despite the revenue surge, SenseTime reported a loss of 2.4 billion yuan in the first half of 2024, narrowing 21.2% from the same period in 2023. For the full year of 2023, the company posted a total loss of 6.49 billion yuan.

While the GenAI business has flourished, SenseTime's traditional AI services, which primarily focus on Smart City projects, saw a significant decline in the first half of 2024. Revenue from this segment dropped by 50.6% year on year, indicating a shift in the company’s focus toward newer and more scalable AI solutions.

SenseTime went public in Hong Kong in 2021, but its stock performance has faced challenges. On Wednesday, shares fell by 5.93% to HK$1.11, remaining far below the initial public offering (IPO) price of HK$5.50. Despite this, the company’s strategic emphasis on GenAI has bolstered its standing in the market.

Recent data from research firm IDC shows that SenseTime has emerged as a major force in enterprise-facing GenAI services. It currently holds the position of the second-largest provider of LLMs for businesses in Chinese mainland, commanding 16% of the market, following Baidu’s 19.9%. However, IDC also highlighted that the competitive landscape of China's AI market is evolving rapidly, with potential for further shifts among leading players.

In addition to its strong performance in LLMs, SenseTime has also made strides in the infrastructure services market. According to IDC's July report, SenseTime ranks as the third-largest provider of generative AI infrastructure services in China, further solidifying its position as a key player in the country’s AI ecosystem.

As SenseTime continues to invest in AI innovation and expand its GenAI offerings, the company is well-positioned to capitalize on the growing demand for AI-driven solutions across various industries.

With a focus on achieving profitability and maintaining its leadership in China’s AI sector, SenseTime is set to play a critical role in shaping the future of artificial intelligence in the region.