SenseTime, founded in 2014 at Hong Kong's Chinese University and listed on the Hong Kong Stock Exchange in late 2021, built its reputation by solving a problem that doesn't scale: bespoke computer vision delivery to government and enterprise clients. According to IDC, it held the top CV market share in China for nine consecutive years from 2015 to 2023. That depth became a liability when the industry stopped rewarding depth.
ChatGPT's arrival in late 2022 shifted the competitive axis from algorithm precision to commercialization speed. SenseTime's project-delivery model, where every client required a custom model and dedicated engineering resources, worked against the new logic of standardized APIs and marginal-cost economics. ByteDance's Doubao, Alibaba's Qwen, and DeepSeek (a Beijing-based LLM startup) collectively captured 71.8% of enterprise model API call volume in the second half of 2025. SenseTime's share is a rounding error by comparison.
The financials reflect this. Generative AI revenue grew 51% to ~$5.2 billion yuan (~$520 million) in 2025, now 72.4% of total revenue. But AIDC compute operating costs jumped 163.5% in the same period, pulling gross margin from 42.9% to 41.0%. The reported profit rests almost entirely on asset sales, with over 90% of the ~$274 million in net other gains coming from divesting subsidiaries and financial assets, not from the core business generating cash.
Cumulative losses over seven years exceed 50 billion yuan (~$7.1 billion). Peak market cap hit HK$300 billion; by 2025 it had fallen to HK$81.3 billion, roughly an 80% collapse.
The 1 X strategy, announced by CEO Xu Li in late 2024, restructures around a dual-engine core: generative AI plus computer vision, focused on building an integrated AI cloud platform across compute infrastructure, foundation models, and applications. The "X" units, autonomous driving, home robotics, smart healthcare, smart retail, spin off as independent subsidiaries with their own CEOs, external fundraising, and no continued group subsidies. CV, the original business, posted its first net profit in 2025 after years of losses.
SenseTime has the technical credentials. Its Riri v6.5, a 600-billion-parameter MoE multimodal model, ranks top-three domestically on OpenCompass and SuperCLUE benchmarks across multimodal tasks. The gap is distribution: without a consumer hit or a cloud ecosystem that drives recurring API revenue at scale, benchmark rankings don't convert to market share.
The 1 X bet is that shedding long-cycle, capital-heavy verticals will let the core unit compete on speed rather than customization depth. Whether that's enough depends on whether seven years of project-delivery habits can actually be unlearned.