SenseTime plunges after short seller alleges the Chinese AI firm inflated revenue

Published

2 years ago

November 28, 2023

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SenseTime, a Chinese artificial intelligence company, has filed to go public in Hong Kong. The move comes as China continues to tighten regulation on the country’s technology giants.

Pavlo Gonchar | SOPA Images | LightRocket | Getty Images

Shares of SenseTime fell as much as 9.7% on Tuesday after U.S. short seller Grizzly Research alleged the Chinese artificial intelligence firm inflated its revenue.

SenseTime shares pared some of those losses in Hong Kong and closed 4.86% lower in the afternoon.

Grizzly Research alleged in a report on Tuesday that SenseTime engaged in a so-called “revenue round-tripping” program.

“SenseTime either directly or through intermediaries provides funds to customers that in turn are used to purchase goods from SenseTime that might never have been delivered,” Grizzly Research alleged. The short seller said it got this information via two court cases in China that described the scheme.

SenseTime responds

SenseTime said in a Hong Kong Stock Exchange filing that it is “reviewing the allegations and considering the appropriate course of action to take to safeguard the interests of all shareholders.”

The Chinese firm said it believes Grizzly Research’s report is “without merit and contains unfounded allegations and misleading conclusions and interpretations.”

SenseTime added that the report “shows a lack of understanding of the Company’s business model and financial reporting structure, and a lack of thorough reading of the Company’s public filings.”

Grizzly Research did not contact SenseTime to verify the information, SenseTime said in its statement.

SenseTime issues grow

SenseTime was once viewed as one of China’s most exciting artificial intelligence companies and is best-known for computer vision technology that can power facial recognition software.

However, the company has been a target of U.S. government sanctions. In 2019, Washington put SenseTime on the so-called Entity List, which restricts American firms from doing business with it. The U.S. alleged that SenseTime is linked to human rights violations in China’s Xinjiang region.

At the time, SenseTime said that it does “not have any business in, nor are we aware of our technology being used in the Xinjiang region.”

SenseTime proposed an initial public offering in Hong Kong in mid-2021 but postponed the listing later that year after the U.S. government added it to a list of “Chinese military-industrial complex companies.”

The company ended up doing its listing at the end of December, pricing shares at 3.85 Hong Kong dollars ($0.49). Shares closed at 1.37 Hong Kong dollars on Tuesday, 64% below their IPO price.

Due to SenseTime’s U.S. government blacklisting, the company “has a severely limited target market and therefore no outlook for any real improvement,” Grizzly Research said in its report.

The short seller also took aim at SenseTime’s technology, claiming it has “no competitive moat in AI.”

“We believe SenseTime is operating a fundamentally dead-ended facial recognition software business, plus some additional AI R&D projects with almost no chance of scalable future profits,” Grizzly Research said.

Technology

More demand than supply gives companies an edge, Jim Cramer says

Published

6 hours ago

October 24, 2025

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More demand than supply gives companies an edge, Jim Cramer says

“Supply constrained,” are the two of the most important words CNBC’s Jim Cramer said he’s heard so far during earnings season and explained why this dynamic is favorable for companies.

“When you’re supplied constrained, you have the ability to raise prices, and that’s the holy grail in any industry,” he said.

Intel‘s strong earnings results were in part because of more demand than supply, Cramer suggested. He noted that the company’s CFO, David Zinsner, said the semiconductor maker is supply constrained for a number of products, and that “industry supply has tightened materially.”

Along with Intel, other tech names that are also supply constrained and performing well on the market include Micron, AMD and Nvidia, Cramer continued.

These companies don’t have enough product in part because the storage needs of artificial intelligence are incredible high, Cramer said. He added that he thinks demand has overwhelmed supply because semiconductor capital equipment companies didn’t manufacture enough of their own machines as they simply didn’t anticipate such a volume of orders.

Outside of tech, Cramer said he thinks airplane maker Boeing and energy company GE Vernova are also supply constrained, adding that he thinks the former will say it’s short on most of its planes when it reports earnings next week. GE Vernova is supply constrained with its power equipment, like turbines that burn natural gas, he continued, which is the primary energy source for the ever-growing crop of data centers.

GE Vernova and Boeing are also set to be winners because they make big-ticket items that other countries can buy from the U.S. to help close the trade deficit, Cramer added.

“In the end, we have more demand than supply in a host of industries and that’s the ticket for good stock performance,” he said. “I don’t see that changing any time soon.”

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Technology

3 takeaways from Intel earnings: Cash flow, foundry progress and hardware surprise

Published

11 hours ago

October 24, 2025

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3 takeaways from Intel earnings: Cash flow, foundry progress and hardware surprise

Wall Street remains skeptical on Intel despite its return to profitability

Intel snapped a losing streak of six straight quarterly losses and returned to profitability in the third quarter.

In its first earnings report since the Trump administration acquired a 10% stake in the company, the U.S. chipmaker posted strong revenue, noting robust demand for chips that it expects to continue into 2026.

Client computing revenue, which includes chips for PCs and laptops, grew 5% year over year, benefiting from PC market stabilization and artificial intelligence PC prospects.

CEO Lip-Bu Tan said in a call with analysts Thursday that artificial intelligence “is a strong foundation for sustainable long-term growth as we execute.”

The chip strength and demand were bright spots, but there were areas of concern as well, with the company’s foundry business still needing a big break.

Here are three takeaways from the chipmaker’s Q3 report:

Cash flow

“We significantly improved our cash position and liquidity in Q3, a key focus for me since becoming CEO in March,” Tan said on a call with analysts Thursday.

Intel landed an $8.9 billion investment from the U.S. government in August, along with $2 billion from Softbank, but has not yet received the $5 billion tied to a deal with Nvidia. The company expects that deal to close by the end of Q4.

With all of those transactions completed, plus the Altera sale, Intel will have $35 billion in cash on hand, CFO David Zinser told CNBC.

The U.S. government is the company’s biggest shareholder, and Intel stock is up more than 50% since Aug. 22, when Commerce Secretary Howard Lutnick announced the deal.

“Like any shareholder, we have to keep in touch with them,” Zinser said of the U.S. stake. “We don’t tell them how the numbers are going before the quarter. We generally talk to them like Fidelity,” another Intel shareholder.

Stock Chart IconStock chart icon

Intel 3-month stock chart.

Foundry

The firm’s foundry remains a work in progress.

Revenue fell 2% over the year before, and it has yet to land a major customer.

Intel now has two fabs running 18A nodes, which are designed for AI and high-performance computing applications.

“We are making steady progress on Intel 18A,” Tan said of its latest chip technology. “We are on track to bring Panther Lake to market this year.”

Zinser said the more advanced 14A nodes won’t be put in supply until the company has “real firm demand.”

Old stuff still selling

Zinser said the company’s older chipmaking processes, or nodes, have continued to do well, “and that was probably the part that was more unexpected.”

Zinser said the chipmaker met some of the central processing unit (CPU) demand with inventory on hand, but they will be behind in Q1, “probably Q2 and maybe in Q3.”

The supply crunch has been with older Intel 10 and 7 manufacturing technologies.

Many customers are opting for less advanced hardware to refresh their operating systems, demonstrating enterprises aren’t waiting for cutting-edge chips when proven technology gets the job done.