What’s Going On Here?China’s largest artificial intelligence company is planning an initial public offering (IPO) in Hong Kong, perhaps vindicating the country’s recent crackdown on its software sector. What Does This Mean?SoftBank-backed SenseTime has reportedly sought HSBC’s help with an IPO which could see it raise some $2 billion selling shares. “The world’s local bank” is particularly big in China, which may mean SenseTime’s able to find foreign investment without falling foul of both Chinese and US crackdowns on Sinostocks listed overseas.
SenseTime develops AI technology for use in autonomous driving, augmented reality, facial recognition, and medical image analysis. The sensitive nature of the data it gathers might help explain why China’s so keen to keep the company’s business within its borders – and why the US added it to a blacklist in late 2019. Why Should I Care?The bigger picture: The proof of the pudding is in the beating.
SenseTime’s move could be seen as evidence that the Chinese government’s heavy-handedness is working wonders. And enthusiastic authorities on Tuesday announced even more trouble for the country’s beleaguered tech giants, with plans now afoot to tighten competition rules and data restrictions. False advertising, fraudulent online reviews, interoperability issues, and consumer privacy (if not from the state) are also in the spotlight.
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Investors don’t like uncertainty: it messes with earnings forecasts and therefore makes their assessments of what stocks are worth less reliable. Government crackdowns on companies are unpopular as a result – something made clear by recent selloffs across Chinese markets and driven home once again on Tuesday as the share prices of local tech giants Alibaba, JD.com, and Baidu all fell 5%. | 
