(Bloomberg) — SenseTime Group Inc. is reducing its office footprint in Singapore, scaling back once-lofty ambitions at a time it’s struggling to compete in the post-ChatGPT era.
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The Chinese AI pioneer is moving from a prime downtown location to a smaller office in a less expensive neighborhood, people familiar with the matter said. The company is giving up a roughly 11,000 square foot (1,022 square meter) space in Frasers Tower for a less central building, the people said, asking to remain unidentified discussing private decisions.
SenseTime is downsizing at a time fellow tech firms including ByteDance Ltd. are expanding abroad, seeking to escape an economic downturn back home. The retreat underscores how SenseTime, which in 2023 lost Alibaba Group Holding Ltd. as a financial backer, is grappling with new rivals in a crowded AI arena.
It also reflects the changing fortunes of Singapore’s prime office market, which has depended on expansions from deep-pocketed Chinese firms in recent years. That’s now softening as companies cut costs and real estate supply rises.
Prime office vacancies in the central business district fell to 6.9% in the last quarter of 2024, but that’s after jumping to their highest levels in more than two years in the previous three months, according to data from consultancy Jones Lang LaSalle Inc.
Just a few years ago, SenseTime joined a wave of firms expanding in the island nation, which was emerging from Covid controls faster than China. Executives told the Business Times in 2021 they were launching what they called a local AI innovation hub, and planned to triple staffing to about 300 within three years.
Representatives for the company in Singapore didn’t respond to requests for comment.
SenseTime — one of China’s first to win approval for generative AI services last year — is now undergoing a restructuring to refocus on that newer field. But it’ll be competing with larger companies as well as a new generation of well-funded startups like Moonshot AI and Zhipu.
Once lauded for breaking ground in areas such as facial recognition, the Chinese firm’s growth began to slow after the US in 2019 blacklisted the company on allegations related to human rights violations in Xinjiang.
That restricted its access to capital and crucial US components, later compounded by curbs on the sale of advanced AI chips and chipmaking equipment to Chinese firms. SenseTime has said the accusations are unfounded.
