SenseTime Group Inc. (SENSETIME-W) saw its stock plummet 6.29% in pre-market trading on Thursday, as the Chinese AI tools developer reported disappointing financial results for the full year 2024. The company's struggles with rising competition and regulatory challenges have taken a toll on investor confidence.
SenseTime reported a net loss of 4.3 billion yuan ($592 million) for 2024, exceeding analyst estimates of a 4 billion yuan loss. While the company managed to narrow its losses compared to the previous year through cost-cutting measures, including staff reductions and decreased marketing expenses, the financial performance still fell short of expectations. Revenue grew by about 11% to 3.8 billion yuan, primarily driven by sales expansion in the generative artificial intelligence segment. However, this figure missed the analyst estimate of 4.5 billion yuan.
Adding to investor concerns, SenseTime was placed on a US blacklist in January for alleged links to the Chinese military, although the company maintains that this has not impacted its business operations. The AI race continues to heat up, with SenseTime facing increased competition in a crowded market. Despite these challenges, the company remains focused on reducing large model training and inference expenses to prepare for the anticipated growth in large model applications.
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