Chinese surveillance firm SenseTime ditches its UK plans

A controversial Chinese surveillance company has pulled plans for a UK base, The Mail on Sunday can reveal.

SenseTime – which is accused of enabling the Chinese Communist Party’s campaign of persecution against Uighur Muslims and has been banned by President Trump – is understood to have been in talks to expand into Europe and use the UK as its regional headquarters.

However, sources said the plans have been pulled amid increasing scrutiny of Chinese companies in Western nations.

SenseTime, worth nearly £6billion, is the world’s most valuable artificial intelligence start-up. Its technology is used in facial recognition and driverless cars.

It processes data captured by China’s 170million CCTV cameras and other systems used by the nation’s police such as smart glasses.

However, the company has come under fire since it was claimed that its technology was being used to track and control minority ethnic groups in China’s Xinjiang province.

Washington blacklisted SenseTime and seven other Chinese AI companies last October, claiming they were complicit in suppressing Muslim minority groups.

The US Department of Commerce said at the time: ‘These entities have been implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention, and high-technology surveillance against Uighurs, Kazakhs and other members of Muslim minority groups in [Xinjiang].’

SenseTime denies being involved in racial profiling.

Other firms added to the list include Hikvision, whose CCTV systems are used by councils across Britain.

News of its UK plans follows the row over Chinese-owned viral video app TikTok, which is considering setting up a London headquarters despite a potential ban in the US.

The Mail on Sunday reported last month that TikTok’s plans had been put on hold as it sought clarity on the US situation. American IT heavyweight Microsoft is in talks to buy some or all of the company from its Beijing-based parent ByteDance – a move which would help it avoid a ban.

SenseTime is accused of enabling the Chinese Communist Party’s campaign of persecution against Uighur Muslims, Kazakhs and other Muslim minority groups in Xinjiang province

Microsoft and ByteDance have until September 15 to strike a deal, otherwise TikTok will be banned in the US after Trump signed an executive order that would prevent firms from doing business with TikTok.

Hong Kong-based SenseTime’s investors include Japanese investment giant SoftBank, which owns Cambridge-based tech company Arm, and Chinese online shopping firm Alibaba.

SenseTime was founded in 2014 by Tang Xiao’ou, a professor at the Chinese University of Hong Kong, and computer scientist Xu Li. Last month, it was reported that the firm was raising £1.15billion in a private funding round and eyeing a stock market float in China.

The White House ban has made an overseas listing difficult, if not impossible, because large institutional investors and investment banks are likely to avoid doing business with banned Chinese firms, reports said.

The Beijing government has said it wants China to become the global leader in AI by 2025.

British Ministers are increasingly taking a hard line against China and its authoritarian regime. Last month, Boris Johnson performed a U-turn and barred Chinese telecoms firm Huawei from operating large parts of Britain’s 5G network amid concerns that it could pass data to the Chinese state.

Critics say China’s intelligence laws compel internet companies such as TikTok and Huawei to provide data to the government if it demands it.

Graham Stuart, a Minister at the Department for International Trade, met representatives from SenseTime last June to discuss the use of artificial intelligence at universities. The outcome of the discussions is unclear, but Stuart is understood to be a vocal critic of China over its treatment of Uighur Muslims.

SenseTime declined to comment on its UK plans, but added: ‘SenseTime was not, and never will be, involved in the so-called racial profiling.

‘We’re deeply disappointed with the US accusation. We believe it reflects a misunderstanding of our company and will work with all relevant authorities to fully understand and resolve the situation.

‘We are a young company working in a rapidly changing and dynamic area of technology. We are dedicated to engaging with our global stakeholders to ensure that they understand our vision and the responsible way we apply AI technology.’