About Li Xu
In a December 2021 interview, SenseTime cofounder and CEO Xu Li discussed the company's initial public offering and its business strategy. Xu stated that 60% of the IPO proceeds would be invested in research and development, specifically to build an artificial intelligence algorithm center for mass-producing AI models. He described the company's approach as "a more fundamental but more difficult path" of early investment in AI infrastructure, which he said accounted for a large portion of R&D expenses but was already showing a scaled effect. Xu said SenseTime saw "a very clear path to achieving profitability" in the next few years due to these investments.
Regarding regulation, Xu said SenseTime attaches importance to data security and believes technology providers should work with other players to formulate industry standards. He argued that "timely interactive regulation" benefits emerging industries, and that regulators should adjust their approach with agility and immediacy, while companies should communicate with academics and regulators. On U.S. sanctions, Xu reiterated that the entity list "has no basis" but acknowledged it hurt SenseTime's international expansion plans, requiring more communication to explain export controls.
Source: AI-verified profile updated from Li Xu's recent appearances.
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Transcript (12 segments)
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Li Xu0:10
Infrastructure and R&D in artificial intelligence. The production cost for technology is the key factor in commercializing it. So the second phase of industrialization is to reduce the cost to a lower level so it can be used in all kinds of scenarios in our daily lives. 60% of the capital raised in this IPO will be spent in research and development to build up an infrastructure called the artificial intelligence algorithm center, which will be used for mass production of AI models that will enhance productivity and reduce cost.
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Interviewer0:45
I can ask you about R&D a little bit. I noticed that looking at your earnings, you're investing a lot in R&D. Why is that? Is it because it's getting harder to...
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Li Xu1:10
This investment, including investing in R&D talent, accounted for a large portion of our R&D expense. But we are already seeing the scale effect from our investments.
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Interviewer1:21
So what is your company doing in order to make sure that you're compliant with China's new data security laws?
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Li Xu1:31
SenseTime always attaches great importance to data security. To some extent, the owner of data is the data processor, but we believe that even technology providers should understand how to safely process data using the technology. I think as the biggest player in the AI industry, we should work with other players to formulate industry standards.
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Interviewer2:11
But your operating losses are getting wider as well. I guess I have to ask you, when is your company going to become profitable and what are you doing in order to ensure that?
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Li Xu2:27
SenseTime's revenue is very healthy. Its loss-to-revenue and loss-to-asset ratios are very low. We believe that investing heavily in technology R&D at the early stage is the only way to make an impact on the industry. For us, we are seeing a very clear path to achieving profitability in the next few years, thanks to our early investment in AI infrastructure.
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Interviewer2:52
It's been a year of regulation. We're seeing it from online gaming with tutoring...
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Li Xu3:10
We believe timely, interactive regulation will benefit emerging industries, especially for the ones in high-speed development. Some premature regulations can't appropriately reflect the boundary of an industry and the technology if the regulators haven't yet fully grasped the changes in the technologies. So regulators should keep adjusting what and how they should regulate. But regulation can also be a painful process if it comes too late, when a great amount of investment has already been put into the sector. It will need a lot more effort to correct the direction. That's why we always believe that two parts of regulations are needed for regulators to embrace the changes in a timely fashion.
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Interviewer4:11
Your company was hit by sanctions during the Trump administration, and that sort of continued more or less during the Biden administration. I think maybe it's one unit that was affected, but how are these sanctions affecting your company's ability to grow overseas, as well as the source from overseas?
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Li Xu4:40
First, I need to reiterate that the U.S. entity list has no basis. But it indeed hurts our overall plan and development for international expansion. It requires us to do more communication to explain the details of the export control when expanding businesses in...
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Interviewer5:00
I see. Thank you.
