(Yicai Global) Dec. 17 -- The US Treasury’s decision to add Megvii Technology to an investment blacklist, thereby barring US investors from investing in the Chinese artificial intelligence firm, is ‘groundless’ and won’t affect the company’s day-to-day operations, it said today.

The accusations are completely unfounded, Megvii said. This is the second time the Beijing-based company has been blacklisted by the US. In 2019 it was placed on the US’ so-called Entity List for similar reasons, blocking it from accessing US software and hardware.

The ban, which takes effect today, has been imposed on a number of Chinese tech giants for their alleged role in facilitating human rights abuses in parts of China.

Megvii always ensures that its technologies affect society in a positive way and strictly abides by the laws of the countries where it operates, it said.

The blacklisting, though, might force Megvii to postpone its upcoming CNY6 billion (USD930 million) initial public offering on the Shanghai Stock Exchange now that US investors can no longer participate. It will be a blow as the company remains unprofitable due to huge research and development expenses.

SenseTime, the country’s biggest AI firm, had to pull its HKD6 billion (USD769 million) Hong Kong listing earlier this week after also being placed on the list of "Chinese military-industrial complex companies."

Megvii develops AI products targeting Internet of Things including facial recognition systems, urban governance and supply chain management. Revenue rose 91 percent in the first half from the same period last year to CNY669 million (USD103.8 million). But its net loss was CNY1.9 billion over the period and in the past three years it has racked up losses of CNY12.8 billion (USD2 billion).

Editor: Kim Taylor