(Yicai) Aug. 28 -- Shares of SenseTime Group tumbled despite the Chinese artificial intelligence company narrowing its first-half loss by 21 percent from a year ago thanks to strong gains at its generative AI business.

SenseTime [HKG: 0020] closed 5.1 percent lower at HKD1.12 (14 US cents) a share in Hong Kong today, after earlier plunging by as much as 6.8 percent.

The net loss was CNY2.5 billion (USD355.1 million) in the six months ended June 30, the Shanghai-based company said in an earnings report released yesterday. Revenue jumped 21 percent to CNY1.7 billion.

Income at the firm’s generative AI business soared 256 percent to CNY1.1 billion, accounting for 60 percent of the total. Income at its smart auto business SenseAuto doubled to CNY168 million (USD23.6 million), while that at its traditional AI business halved to CNY520 million. Overseas revenue jumped 40 percent to CNY314.5 million.

The stellar growth at its generative AI business was due to robust demand for large language models and smart computing services in China, the leap in capabilities of the SenseNova LLM, the sharp decline in inference costs, and a quick increase in overall LMM usage, SenseTime said.

SenseNova’s clients have expanded to those in smart hardware, electric vehicles, robotics, medical care, and financial companies from just internet firms, Xu Li, co-founder and chief executive, said on an earnings conference call. The LLM's overall usage surged 400 percent, with the number of users and average usage soaring, he added.

The scale effect of SenseTime intelligent computing services has also been further strengthened. The firm's computing power has jumped 70 percent to 20,000 petaflops since March. 

SenseTime's LLM platform and applications have a 16 percent share of the Chinese market, ranking second, according to International Data Corporation. Its smart computing services were third with a 15.4 percent market share.

Editor: Martin Kadiev