SenseTime Group Inc plunged its most in more than a year after its co-founder’s surprise death spooked investors already grappling with the fallout from slowing growth and US sanctions.

The Chinese artificial intelligence (AI) firm slid as much as 18% in Hong Kong on Monday, the biggest loss since July 2022.

SenseTime disclosed that co-founder and major shareholder Tang Xiao’ou died on Friday after an illness. Born in 1968, the Massachusetts Institute of Technology graduate was regarded as a pioneer in China’s burgeoning AI sector, helping create one of the nation’s leaders in computer vision.

His company, earlier backed by Alibaba Group Holding Ltd, listed in Hong Kong in one of the most highly anticipated debuts of 2021. Tang had a 21% stake in SenseTime, according to the firm’s 2022 annual report. His net worth last stood at US$1.1 billion , the Bloomberg Billionaires Index shows. 

SenseTime was blacklisted by the US government in 2019 on allegations related to human rights violations in Xinjiang. This year, it was among the first Chinese tech firms to receive government approval to publicly roll out ChatGPT-like services. 

But its shares have fallen in recent weeks after short-seller Grizzly Research accused the firm of inflating revenues. Before Monday, its shares traded at HK$1.26 (75 sen) - less than a third of its listing price. 
 

  - Bloomberg