China’s SenseTime Group Inc. reported a wider-than-estimated net loss for the full year as the AI tools developer continues to grapple with rising competition in a crowded market.

SenseTime shares sank 7.6% in morning trading on Thursday.

The company reported net loss of 4.3 billion yuan ($592 million) in 2024, compared with estimate of 4 billion yuan loss. Still, the losses have narrowed from a year earlier as SenseTime slashed staff, marketing and traveling expenses.

Revenue grew by about 11% to 3.8 billion yuan — led by sales expansion in generative artificial intelligence segment — but still missed the 4.5 billion yuan analyst estimate. The generative AI segment reported triple-digit growth for the second consecutive year and is among the fastest growing businesses, the company said.

“We aim to drive reductions in large model training and inference expenses by multiple folds annually, preparing for the explosive growth of large model applications,” the Chinese AI pioneer said in an exchange filing.

In January, the firm was added to a list of companies blacklisted by the US for alleged links to the Chinese military. SenseTime objected to the move but said being added to the list has no actual impact on its business. Meanwhile, it scaled back expansion plans in Singapore as competition heats up with the rise of ChatGPT.

The company is also collaborating with DeepSeek, another Chinese startup that created a buzz after it was unveiled globally in January.