SenseTime Integrates Rival Tech and Expands Internationally to Compete in AI Market

Com reported. The company's co-founder, identified as Lin in the report, said ByteDance's AI video model Seedance initially posed a competitive concern. SenseTime has since integrated some of Seedance's capabilities into its short-video tool Seko, combining Seedance's background generation with SenseTime's own audio functions.

Technology represents only half the battle, with business models gaining importance, according to the report. OpenAI reported a miss on revenue and user targets, as detailed by The Wall Street Journal, signaling risks for both Chinese and American AI players, Jefferies noted in an April 28 analysis.

Large internet platforms hold stronger cash flow, access to user data and established customer bases for selling AI applications, Jefferies added.

Platform companies including Alibaba, Tencent and ByteDance can leverage their core businesses to subsidize AI development and enhance existing operations, said Vey-Sern Ling, a senior equity advisor at UBP. "They are obviously in a better position than the standalone ones, which continue to be loss-making," Ling said, while noting that heavy AI spending has weighed on profits even at larger players like Alibaba and Kuaishou.

SenseTime had a booth at the World Artificial Intelligence Conference 2021 in Shanghai, China, on July 7, 2021, highlighting its presence in the sector.

To differentiate, SenseTime has combined large AI models, applications and infrastructure to improve service quality while lowering costs per use, Lin said. Many of SenseTime's products target enterprise clients, who often demand higher-quality services, are willing to pay more and are less likely to switch providers, according to Lin.

6% last year and reported positive EBITDA in the second half for the first time since listing in 2021.

SenseTime listed in 2021, marking a key milestone. The company's AI costs are manageable and largely focused on making models more efficient, Lin stated. SenseTime has focused its international expansion on markets such as Southeast and North Asia, the Middle East, and more recently Brazil.

-Israeli war on Iran has caused short-term disruptions impacting flights and interactions, Lin said, but SenseTime's long-term strategy in the Middle East region remains unchanged. "Oftentimes, the reason behind repeat buying is not about the technology being particularly advanced, but providing the best service at a competitive price," Lin said, emphasizing cost-efficiency and practical utility in overseas markets.

Pure-play AI model companies face challenges including low customer loyalty, limited differentiation, a crowded field and high training costs, according to Jefferies.

Analysts observe varying pricing strategies in the sector, with some firms slashing prices to attract users while others raise them to commercialize advanced models. "Price wars might serve a strategic function in short-term promotions, but sustainability in the long run depends on differentiated value," Lin said.

Some AI companies may be following a playbook of incurring losses to gain market share before monetizing later, Ling noted.

"They cannot keep subsidizing the usage of AI because it's very expensive," Ling said. "Either they can paint a picture of huge future usage and demand and help investors understand that near-term losses are acceptable. " SenseTime's trajectory, including its narrowed losses and positive EBITDA, will be closely watched by investors, the report indicated.

The company's focus on enterprise clients and efficient models positions it amid broader competition from integrated platforms.