Once mocked by netizens for its avant-garde 'aircraft carrier building' design, deemed 'unstable and ungrounded,' SenseTime now appears to be thriving, with its AI moat deepening further, as evidenced by its latest performance.

01. Two Reports Shatter 'Feng Shui Rumors'

As the first AI company to go public, SenseTime has long been a focal point in the industry. Since its inception, the company has weathered years of massive losses, a pre-IPO clash with the U.S., the passing of legendary founder Tang Xiaoo, misinterpretations about executive compensation, layoffs, and other challenges—yet it remains resilient.

Its latest financial results reveal significant signs of improvement:

In 2025, SenseTime's revenue exceeded 5 billion yuan, surging 33% year-on-year to a record high. Generative AI revenue reached over 3.6 billion yuan, up 51% YoY, accounting for 72.4% of total revenue and becoming the core growth driver. Annual losses narrowed by 58.6% YoY.

Loss reduction accelerated for four consecutive half-year periods. The cash conversion cycle shortened from 228 to 129 days. As of December 31, 2025, the company held 10.9 billion yuan in cash and cash equivalents and 2.28 billion yuan in time deposits, maintaining ample liquidity compared to 8.888 billion yuan and 2.971 billion yuan at the end of 2024, providing solid support for long-term development.

In the second half of 2025, SenseTime's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) turned positive at 380 million yuan, while operating cash flow achieved its first net inflow since listing. The CV2.0 business (computer vision AI) achieved positive net profit first and maintained positive operating cash flow for two consecutive years.

EBITDA, a key metric reflecting a company's core profitability and cash-generating ability from its main business, became a symbol of SenseTime's shift away from relying on shareholder injections to meet cash needs.

In Q1 2026, revenue reached nearly 1.46 billion yuan, up over 35% YoY, with gross margins stabilizing above 35%—continuing to rise steadily compared to 2025. Institutions estimate that if SenseTime maintains its current growth pace, annual revenue could hit 10 billion yuan.

Goldman Sachs predicts further profit growth in 2027; GF Securities raised SenseTime's target price, forecasting over 25% stable growth in the next three years; MSCI included it in its China Index, attracting passive investment and supporting valuation. Capital market confidence continues to recover.

From 2018 to 2025, SenseTime accumulated losses exceeding 56 billion yuan. Yet, it not only survived the 'valley of death' but sustained capital market confidence. The essence of its financial rebound and endorsement by investment banks/brokers lies in its internal strength.

02. How Did SenseTime Navigate the 'Valley of Death?'

Xiaomi founder Lei Jun's investment firm, Shunwei Capital, embodies the principle of 'going with the flow.' What is 'the flow?' For AI players, large models represent one of the biggest trends.

SenseTime's first technological pivot proved pivotal in its turnaround!

Starting as a computer vision specialist, SenseTime has dominated China's visual AI market for a decade, per IDC. Despite its leadership, the company avoided technological complacency, staying attuned to cutting-edge trends.

By late 2022, SenseTime had begun reserve (preparing) large model technologies. The following year, it shifted its business focus to generative AI, restructuring into three segments: generative AI, traditional AI, and smart vehicles.

In December 2024, SenseTime reorganized its business into '1+X': '1' represents generative AI, including computing power infrastructure ('SenseCore'), foundational models, and applications; 'X' covers smart vehicles ('SenseAuto'), home robots ('Yuan Luobo'), smart healthcare, and smart retail, with plans to spin off and independently finance these units.

That year, generative AI revenue surged 103.1% YoY to 2.404 billion yuan, accounting for 63.7% of total revenue (up from 34.8% in 2023), becoming its top revenue source.

The 2025 financial report showed generative AI contributing over 70% of revenue. Ranked first among 16 domestic mainstream large models in Frost & Sullivan and Headline Research's 'China Large Model Annual Evaluation,' SenseTime led in general foundational capabilities and multimodal image understanding.

These achievements solidified SenseTime's commitment to the track (sector), as seen in its placement announcement:

In April 2026, SenseTime announced a net placement of approximately 3.23 billion HKD, allocating 40% to expand SenseCore, particularly localized AI supercomputing clusters, and 30% to generative AI R&D, focusing on continuous innovation of the 'SenseNova' series.

SenseTime also announced plans to launch a new foundational model based on its second-generation NEO architecture in Q2 2026, validating a new 'scaling law' for deep unification of understanding and generation in native multimodal architectures—underscoring its ambition to widen the technological gap and consolidate (consolidate) competitive advantages.

Rejecting self-indulgent innovation and scaling technological achievements into commercial returns proved SenseTime's strongest strategy to navigate the 'valley of death.'

As early as 2024, SenseTime's 'SenseNova' edge models penetrated industries, engaging over 150 clients in commercial pilots across smartphones, tablets, VR headsets, in-car computers, and smart lamps. Over 3,000 industry leaders used its large models and AI computing services during the period.

In 2025, SenseTime's AI-native applications expanded into general office, finance, smart marketing, content creation, and Pan intelligent terminal (pan-smart devices), generating commercial returns in autonomous driving, home AI robots, smart healthcare, smart retail, and embodied AI. Its 'X' business revenue exceeded 300 million yuan in 2025.

SenseTime's productivity tool, the 'Raccoon Family,' fully integrated into Lenovo's ecosystem, offering 'out-of-the-box' smart office services via Lenovo's multi-terminal devices to global users, covering hundreds of millions of users.

According to Frost & Sullivan's '2025 H1 China Full-Stack AI Cloud Service Market Report,' SenseTime ranked among the top four in China's full-stack AI cloud market and first among native AI cloud providers. In the '2025 China AI Infrastructure Market Report,' it entered the 'Leaders Quadrant,' ranking in the first tier.

Regarding computing power infrastructure, SenseTime collaborated with over ten chip firms, including Huawei Ascend, Hygon, and Cambrian, to build 'Computing Power Mall.' Its self-developed LightX2V framework featured a highly compatible localization adaptation plugin, achieving full compatibility with Ascend 384 super nodes and supporting mainstream chips like Cambrian, Moore Threads, Hygon DCU, and Ascend 910B, resolving localization compatibility issues.

Leveraging cutting-edge technologies like step distillation and extreme quantization, SenseTime pioneered real-time video generation for physical world simulation and outperformed overseas top-tier chips on process-constrained domestic hardware. Recommended by Alibaba, Tencent, and other leading firms, its open-source models surpassed 10 million downloads on HuggingFace, ranking globally in the top ten.

On June 16, SenseTime announced a memorandum of cooperation with Hong Kong Science Park to launch strategic collaboration on computing power infrastructure and AI ecosystems. The partners aim to build Hong Kong's largest localized AI computing center, targeting 40,000+ PetaFLOPS of computing power by 2030.

On June 25, Shanghai Xuhui reported that Gartner, a global IT research authority, released a visual AI report, listing SenseTime among 2026's 'Frontier Technology Innovators' in generative AI computer vision—one of only two Chinese firms on the list.

What surprises will SenseTime bring next?

References: Cover image sourced online

'From Card Stockpiling to Efficiency': SenseTime's Computing Power Breakthrough Logic - Caijing

U.S. Government Suddenly Attacks; SenseTime Insists on 'Listing ASAP' - China Business Journal

Has SenseTime Transformed from R&D Burn to Systematic Profitability? - China Insights

Historic Strongest Earnings! SenseTime Achieves Positive Operating Cash Flow, to Launch New Foundational Model - Phoenix News

SenseTime Clarifies Executive Compensation Misinterpretation: Actual Pay Ranges from 2–3 Million - Southern Metropolis Daily

Full-Link Support for Localized Large Models 'Day 0 Adaptation': A New Turning Point for Domestic Computing Power? - Xinmin Evening News

SenseTime Gains Global Recognition: Named 'Frontier Technology Innovator' in Generative AI Computer Vision - Shanghai Xuhui