Text/Yang Jianyong
The concept of artificial intelligence was first proposed at a Dartmouth conference in 1956, and after several rounds of ups and downs, artificial intelligence has now been widely used in all walks of life, driving the global artificial intelligence market to show a booming trend. It should be pointed out that under the outlet of artificial intelligence, countless AI unicorns have emerged, the most representative of which are the four small dragons of AI (Shang Tang, Megvii, Yuncong, Yitu), as well as Yuntian Lifei, Geling Deep Pupil and so on.
Only in the spotlight of AI unicorns, low self-hematopoietic ability, long-term loss of the situation, the need for continuous financing, if can not obtain enough funds with the appropriate conditions, its development may be significant and adversely affected, and then see the AI unicorns have bravely entered the capital market, showing ai unicorns piling up IPO phenomenon. Among them, Geling Deep Pupil took the lead in obtaining IPO approval before AI unicorns such as Megvii and Yuncong, with an issue price of 39.49 yuan, a fundraising amount of 1.826 billion yuan, and a total market value of 7.3 billion yuan after the issuance. So, in the hottest artificial intelligence track at present, what is the color of Glaing's deep pupils?
Artificial intelligence has broad prospects, and the market size will exceed the $500 billion mark
First of all, the demand for artificial intelligence in various industries is strong, and the AI market is huge. According to the Global Artificial Intelligence Tracking Report released by IDC, the global revenue of the artificial intelligence market (including software, hardware and services) is expected to be $432.8 billion this year, an increase of 19.6% year-on-year, and is expected to exceed the $500 billion mark in 2023.
The rapid development of artificial intelligence, in the author's view, is mainly due to the significant improvement of computing power, the improvement of algorithms, the increasing maturity of artificial intelligence technology, and the reduction of hardware costs, making artificial intelligence technology widely used in all walks of life. For example, in the manufacturing industry, the use of artificial intelligence, Internet of Things and other new technologies to promote the manufacturing industry towards intelligent manufacturing transformation, production efficiency has been greatly improved, laying the foundation for the sustainable development of enterprises. The financial and retail industries are also increasing investment in technology, applying cutting-edge technologies such as artificial intelligence, and adopting automated processes in products, channels and scenarios to serve users more efficiently.
In the entire artificial intelligence market, edge artificial intelligence, computer vision, etc. are the most potential markets. Gartner, an authoritative research firm, found that respondents to enterprises investing in artificial intelligence said that they had the highest planned investment in computer vision, with an average investment of $679,000 in two years. Investment in artificial intelligence will increase, and players on the artificial intelligence track are expected to reap this market dividend.
AI manufacturers reap artificial intelligence dividends, and their revenue shows a strong growth trend
Secondly, benefiting from the landing of AI technology, AI manufacturers' revenue growth is strong. Taking Baidu as an example, the annual revenue of 2021 was 124.5 billion yuan, an increase of 16% year-on-year, while the revenue of China- Africa-Guangzhou increased by 71% year-on-year, mainly due to the in-depth application of Baidu AI technology in various walks of life, firmly promoting AI technology innovation and application, and is regarded as Baidu's growth engine. AI unicorns, in the face of artificial intelligence opportunities, revenue is showing an amazing growth trend. SenseTime's revenue in 2018 was 1.853 billion yuan, which will grow to 3.446 billion yuan by 2020, with a compound annual growth rate of 36.4%.
As the first of the four AI tigers, According to the Frost & Sullivan report, SenseTime is the largest artificial intelligence software company in Asia and the largest computer vision software provider in China in terms of revenue in 2020. According to the latest report of IDC, an authoritative research institution, SenseTime has the highest market share in computer vision in mainland China and ranks first in the industry. Benefiting from the ARTIFICIAL intelligence dividend, it has performed strongly since its listing on the Hong Kong Stock Exchange, with a current price of HK$6.52 and a market capitalisation of HK$218.5 billion, up 70% from the HK$3.85 issue price.
Green Deep Pupil is also one of the important players in machine vision, and its revenue has shown a rapid growth trend. In 2018, 2019, 2020 and the first half of 2021, the revenue was 51.96 million yuan, 71.21 million yuan, 243 million yuan and 72.188 million yuan respectively, and the compound growth rate of revenue in the last three years reached 116.12%. Founded in 2013, this AI unicorn is an early explorer and practitioner of the domestic computer vision industry and algorithm technology, focusing on the deep integration of advanced computer vision technology and big data analysis technology with application scenarios, and the artificial intelligence products and solutions provided have been successfully applied in the three major fields of urban management, smart finance, and commercial retail.
Unfortunately, Glenn's deep pupil revenue concentration is high. In the field of urban management, the main customers are large integrators, and the prospectus discloses that the revenue of the top five integrators during the reporting period accounted for 84.74%, 60.93%, 40.44% and 60.14% respectively. In the smart finance scenario, it is more dependent on a single customer. During the reporting period, the revenue from the Agricultural Bank of China accounted for 70.91% of the total revenue of the smart finance sector. In the field of smart retail, a single customer accounts for 98.91% of total revenue.
It can be seen that The deep pupil of Gehring has a single landing scenario in the field of smart finance and commercial retail, which will bring about revenue fluctuations and face uncertainty in revenue growth. Revenue for the first three quarters of 2021 was RMB139 million, up 2.35% year-on-year. The main reason is that the revenue growth in 2021 is mainly in the financial sector, and the revenue growth of the main end-customer ABC in this field will be concentrated in the fourth quarter.
Continued losses have sparked concerns about the outlook for AI unicorns
Although the revenue shows a strong growth trend, the long-term loss of AI unicorns is one of the biggest problems, profitability is worrying, and on the road to artificial intelligence of "poetry and far away", artificial intelligence commercial application scenarios will be the core of AI unicorns. From 2018 to 2020, the losses of GreenIng Deep Pupil were 74.55 million yuan, 418 million yuan and 78.2 million yuan respectively, and the cumulative loss of three and a half years was 570 million yuan, and the expected loss in 2021 was 65 million to 80 million yuan, and the loss narrowed compared with the previous year, mainly due to the reduction in the share payment expenses expected to be amortized in 2021 compared with the previous year.
In response to the continuous loss, Gehring Deep Pupil pointed out that it was mainly due to the fact that it was still in the early stage of rapid growth, the overall scale of revenue was small, the investment in research and development was high, and multiple rounds of equity incentives were implemented, resulting in higher share payments in the expenses during the period. Operating losses narrowed in each period of the reporting period as the Company's revenue grew rapidly. In view of the future profitability, it is claimed that with the rapid development of the artificial intelligence industry in the future, the company's solutions in downstream application scenarios will continue to be enriched, and the scale effect will gradually appear, and it is expected that the future operating loss will continue to narrow until it achieves profitability.
Not only Glenn deep pupils, but other AI unicorns are also in a loss dilemma. The data shows that in 2018, 2019, 2020 and the first half of 2021, SenseTime lost 3.432 billion yuan, 4.967 billion yuan, 12.158 billion yuan and 3.713 billion yuan respectively, with a cumulative loss of 24.27 billion yuan during this period. Of course, the loss of more than 24 billion yuan during this period was mainly due to the fair value loss of preferred stock. During the period, the adjusted net loss of EBITDA was $150 million, $1,155 million, $707 million and $578 million, respectively, and the total adjusted loss for three and a half years was $2.59 billion.
In 2018, 2019 and 2020, Yuncong Technology lost 181 million, 1.708 billion and 690 million yuan respectively, with a loss of 323 million yuan in the first half of 2021 and a cumulative loss of 2.9 billion yuan in three and a half years. Yitu Technology lost more than 7.2 billion yuan during this period, and Megvii Technology and Yuntian Lifei were also in a loss situation. It should also be pointed out that cambrian, which used to be listed on the science and technology innovation board as an AI chip unicorn, was also highly sought after by capital in the previous few trading days, with the highest market value of 119.1 billion yuan.
Compared with the pursuit at the beginning of the listing, cambrian began to enter a long period of shock downward, compared with the highest market value has been pulled back by 70%, once the highest market value reached 119.1 billion yuan, and now the market value of 34.7 billion yuan, a decrease of 84.4 billion yuan. Long-term losses are difficult and competition is becoming increasingly fierce, it is difficult to support the Cambrian market value of 100 billion yuan, the loss in the past three years exceeded 2.4 billion yuan, the loss is further expanded, the loss of 435 million yuan in 2020 expanded to 847 million yuan, the loss increased by 95%; the loss after deduction is as high as 1.133 billion yuan.
At last
Technology landing, continuous losses, intensified competition and many other factors, the prospects of AI unicorns with continuous losses are not optimistic. In particular, with the continuous development of artificial intelligence, competition in technology and market may be further intensified, and the sustainable development and operating performance of industry enterprises are facing certain challenges. Compared with the artificial intelligence enterprises in the same industry, the company's operating scale is relatively small, and the comprehensive competitiveness still needs to be further enhanced.
Players on the artificial intelligence track, the final competition is the ability to land technology, which is also an important basis for measuring the strength of AI. Overall, due to many factors such as the perfect service of technology giants and the ability to land scenes, the use of artificial intelligence to help all walks of life to transform and upgrade is also reaping the dividends of industry development. For AI unicorns, in the face of an increasingly fierce competitive environment, whether they can maintain sustained growth depends on the ability of AI scenes to land.
Jianyong Yang, a contributor to Forbes China, is committed to in-depth interpretation of cutting-edge technologies such as the Internet of Things, cloud services and artificial intelligence.