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Goldman Sachs reviews role in Chinese tech firm Megvii

BBC Technology 09 Oct 2019 07:48
Face++Image copyright Megvii

Goldman Sachs will review its involvement in the planned stock market listing of Chinese artificial intelligence firm Megvii.

The US has blacklisted the company, alleging it is "implicated" in the repression of Muslim minorities.

Megvii, best known for its facial recognition algorithms, is reportedly seeking a valuation of up to $1bn.

In an emailed statement, Goldman Sachs said it was evaluating its role "in light of the recent developments".

Goldman is a joint sponsor of the Megvii initial public offering, alongside Citigroup and JPMorgan Chase.

The US has blacklisted 20 Chinese government entities and eight firms it said were implicated in "repression, mass arbitrary detention, and high-technology surveillance". Most of the government entities are security bureaus, while the eight firms are primarily AI-driven companies with applications that can be used for surveillance.

It has been reported that Megvii technology has helped police make thousands of arrests in China. However, the US document that blacklists the companies doesn't detail its involvement in Xinjiang.

In a related development, Massachusetts Institute of Technology told the Bloomberg news agency it was reviewing "all existing relationships" with Chinese firms on the entity list. That could impact Sensetime, which formed an alliance with the university last year to jointly fund research.

Megvii will be the first Chinese artificial intelligence firm to go public if its Hong Kong listing goes ahead. The Alibaba-backed tech company, which previously traded under the name Face++, is best known for its facial recognition technology.

Image copyright Megvii

That could limit the access of China's AI companies to US-made made microchips, upon which they're currently heavily reliant.

It's also an issue in Hong Kong, where protestors engaged in the current unrest are using a combination of high and low tech methods to elude police surveillance.

The eight blacklisted Chinese companies are not the only ones to face the ire of the US government. Washington has previously imposed similar restrictions on other Chinese companies, notably smartphone maker Huawei, on national security grounds.

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