On December 3, SenseTime chairman and CEO Xu Li announced a significant restructuring in an internal memo. The company will now focus on its core businesses—artificial intelligence (AI) cloud and general vision model—while spinning off its smart vehicle (SenseAuto), home robotics (SenseRobot), smart healthcare, and smart retail segments into independent companies, each with its own CEO.

Xu explained that the restructuring aims to accelerate profitability and stabilize cash flow. Operating independently, these spinoffs can target niche markets while leveraging SenseTime’s infrastructure and advancements in model development. “This approach fosters both autonomy and collaboration,” Xu wrote.

The reorganization introduces a “1+X” framework, where “1” represents SenseTime’s AI cloud business—integrating large-scale infrastructure, foundational models, and applications—and “X” signifies the ecosystem of spinoff companies positioned to capture specific market opportunities.

Founded in 2014, SenseTime achieved a milestone initial public offering (IPO) on the Hong Kong Stock Exchange in December 2021, becoming one of China’s prominent AI unicorns. Its expertise in computer vision and deep learning has propelled it into diverse industries, including automotive, robotics, healthcare, and retail.

In October, SenseTime launched a strategy emphasizing large-scale infrastructure, foundational models, and applications, marking a shift toward centralized and efficient operations. This aligns with the emergence of AI 2.0, characterized by generative models reshaping the industry landscape.

Xu has previously highlighted the shift from AI 1.0, where costs were primarily driven by R&D personnel, to AI 2.0, where computing power dominates expenses. To commercialize generative large models, Xu emphasized the need to reduce production and usage costs.

With this restructuring, SenseTime is consolidating its strengths and reallocating resources to lead in the AI 2.0 era, positioning itself for the next wave of AI innovation.

KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Tian Zhe for 36Kr.