(Bloomberg) — SenseTime Group Inc. co-founder Tang Xiao’ou has become one of the world’s richest people, after the Chinese AI champion blew past concerns about American sanctions to surge as much as 23% on its Hong Kong debut.
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The Massachusetts Institute of Technology alum’s wealth has jumped by $500 million to roughly $3.9 billion after SenseTime ended the morning session about 11% above its initial public offering price, according to the Bloomberg Billionaires Index.
SenseTime’s rip-roaring debut defied all expectations, particularly after a U.S. ban on American investors forced the AI company to first delay its IPO, then price its shares at the very bottom of a previously indicated range.
Investors had been nervous about the fallout from the blacklisting, which stem from allegations SenseTime’s facial-recognition software perpetuates human rights violations in the far western region of Xinjiang. The sanction, which came on top of an existing ban on sales of American technology, was announced just days before the debut.
SenseTime has said the accusations are unfounded. Its executives were visibly moved Thursday as they convened for a livestreamed listing ceremony, with at least one in tears as he announced the opening pop.
“Every company will have their own challenges and objectives. For us, it’s about getting back on the front foot as creators and pioneers,” Xu Li, Tang’s fellow founder and SenseTime’s chief executive officer, said during the ceremony attended by Paul Chan, the financial secretary of Hong Kong.
Read more: SenseTime Jumps on Debut After IPO Delayed by U.S. Sanctions
SenseTime is the first overseas offering by a high-profile Chinese tech unicorn since Didi Global Inc.’s June IPO in New York sparked a regulatory backlash by officials in Beijing, effectively freezing most major tech debuts.
Tang’s rapid ascent contrasts with his peers at China’s largest tech firms, which collectively shed some $80 billion of wealth in 2021 thanks to Beijing’s year-long campaign to rein in tech excesses. Unlike many of his cohorts, the SenseTime co-founder hailed from the world of academia, as an information engineering professor at the Chinese University of Hong Kong.
He has long been involved in developing the artificial intelligence required for facial recognition. Tang received his undergraduate degree from the University of Science and Technology of China, then graduated from the University of Rochester in New York and got his PhD from MIT in 1996, where he studied underwater robotics and computer vision.
Tang worked for Microsoft Research Asia for a few years before co-founding Shanghai-based SenseTime in 2014 with Xu, then a research scientist at Lenovo Group Ltd. Their company attracted early investment from IDG Capital, then picked up backers including SoftBank Group Corp., Alibaba Group Holding Ltd. and Silver Lake.
Read more: China’s Tech Moguls See $80 Billion of Wealth Evaporate in 2021
Investors may now be counting on SenseTime’s domestic growth prospects even as opposition solidifies abroad. SenseTime is the largest AI software firm in Asia with an 11% market share, according to the prospectus. The technology is deployed in a range of areas, including helping police in China, providing product placements in films and creating an augmented reality scene in a mobile game by Tencent Holdings Ltd.
It relaunched its IPO process days after the blacklisting with a group of cornerstone investors increasing their bets to $512 million. Those included state-backed names like the Mixed-Ownership Reform Fund and the Shanghai Xuhui Capital Investment Co.
SenseTime’s revenue increased 14% last year to 3.4 billion yuan ($534 million), though it still posted an operating loss.
“Investing heavily in technology R&D at the early stage is the only way to make an impact on the industry,” Xu said in a pre-recorded interview with Bloomberg Television. “For us, we are seeing a very clear path to achieving profitability for the next few years, thanks to our early investments in AI infrastructure.”
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