China's SenseTime delays Hong Kong IPO after placement on U.S. blacklist
SenseTime, a Chinese developer of facial recognition technology, is delaying its Hong Kong IPO after being added to a U.S. Treasury Department blacklist of "Chinese military-industrial companies."
Why it matters: This is China's most highly valued AI company, fetching a $13 billion mark after being placed on a different U.S. government blacklist for its alleged involvement in human rights abuses against Uyghur Muslims. That original designation prevented SenseTime from doing business with U.S. companies, whereas the new one prevents U.S. investors from buying or selling its listed shares.
U.S. investors in SenseTime include Fidelity, Glade Brook, Qualcomm Ventures and Silver Lake. Other backers include Alibaba, SoftBank and Primavera Capital Group. The company originally planned to raise $2 billion in its IPO, but later cut its target back to $767 million.
The bottom line: SenseTime says the U.S. accusation are "unfounded" and that the delay is designed to let it update its prospectus. Retail investors who already subscribed to the IPO, which was expected to price this Friday, will have their fees, interest and other costs refunded.