SenseTime Downsizes Singapore Office Amidst AI Competition

SenseTime Group Inc., a leading Chinese AI company, is scaling back its operations in Singapore, signaling a retreat from ambitious expansion plans, according to information shared by sources to Bloomberg.The company is moving from a large office in a prime downtown location to a smaller office in a less expensive neighborhood, according to people familiar with the matter who requested anonymity due to the private nature of the information. SenseTime is giving up approximately 11,000 square feet of space in Frasers Tower for a new location in a less central building.This downsizing comes as other tech giants like ByteDance Ltd. are expanding overseas, seeking to mitigate the impact of China's economic slowdown. SenseTime's retreat highlights the challenges it faces in the crowded AI market, especially after losing Alibaba Group Holding Ltd. as a financial backer in 2023. The move also reflects the changing dynamics of Singapore's prime office market, which has traditionally relied on expansion from well-funded Chinese companies. However, this trend is softening as companies cut costs and new office space becomes more readily available.Just a few years ago, SenseTime was at the forefront of companies expanding in Singapore, aiming to leverage the nation's faster economic recovery from Covid-19 restrictions compared to China. Executives told the Business Times in 2021 that they were establishing a local AI innovation hub and planned to triple their workforce to around 300 within three years.SenseTime's Singapore representatives did not respond to requests for comment.SenseTime, one of the first Chinese companies to receive approval for generative AI services last year, is currently undergoing a restructuring to focus on this emerging field. However, it faces intense competition from larger established companies and a new wave of well-funded startups like Moonshot AI and Zhipu.The company's growth has slowed since 2019 when the US added it to a blacklist over allegations of human rights abuses in Xinjiang, restricting its access to capital and crucial US components. These restrictions were compounded by limitations on the sale of advanced AI chips and chipmaking equipment to Chinese firms. SenseTime has maintained that the accusations are unfounded.