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The postponement of the stock market debut of AI company SenseTime was not newsworthy for Chinese state newspapers, such as the Global Times. That may be because of its connection to sensitive human rights issues: The US government had unequivocally linked the company to the total surveillance of the Uyghur people. Finn Mayer-Kuckuk analyzes the backstory of the entanglement of geopolitics, finance, and AI. The former flagship company has not only lost its glory, but also its innocence.
Beijing’s strict capital controls have driven casino operators in the Macau Special Economic Zone to be constantly on the lookout for new loopholes in recent years. Citizens of the People’s Republic can legally transfer only $50,000 outside the country per year. Macao’s casinos have thus lured wealthy people to their city with pleasure trips and paid them their winnings in US dollars or euros. The stakes had to be high enough – otherwise, access to VIP rooms was denied. With the arrest of gambling baron Alvin Chau, Beijing is sending a warning signal to the entire industry. Head of state Xi Jinping not only wants to bring the entertainment and technology industries back in line but also the financial and gambling industries, as our Beijing authors analyze.
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SenseTime postpones IPO
SenseTime is one of the AI companies that already found a practical use for their technology. The company’s software provides facial recognition with unprecedented accuracy. But despite investor interest, the company has postponed a planned Hong Kong IPO for the time being. The reason is a decision by the US government. The US government has imposed new sanctions on SenseTime (China.Table reported), which also affect the company’s future financial position. The reason for the sanctions is the large-scale application of SenseTime products to monitor the Uyghur minority.
SenseTime is thus another renowned company that has become part of the political mix. However, there are differences to other companies affected by US sanctions. Telecom equipment maker Huawei, semiconductor manufacturer SMIC, or mobile phone operator China Mobile all point to having only superficial relations with China’s security authorities. Even though no one in China can escape the wishes of the state, the reasoning of these companies is solid. SenseTime, on the other hand, provides core components for the total digital surveillance state.
Last Friday was the fateful day for SenseTime’s stock market plans. On the one hand, December 10 is Human Rights Day. For US President Joe Biden, it also marked the end of a vaguely productive democracy summit to which China was expressly not invited. The US government then followed up with sanctions on the occasion of Human Rights Day and the Democracy Summit. SenseTime was a logical target because media reports had already created the necessary profile. Unlike previous US sanctions, this time it was explicitly in response to the oppression of the Uyghurs. Other sanctions were imposed on Myanmar and North Korea that day. The legal basis was the classification as part of the “military-industrial complex of the People’s Republic of China”.