Behind the Rise of China’s Facial-Recognition Giants

Artificial intelligence startup Megvii mentioned a similar public housing security contract in an unspecified Chinese city in filing for an initial public offering in Hong Kong last week. The Chinese company, best-known for facial recognition, touts its government dealings, including locking down public housing to curb subletting, as a selling point to potential investors.

Megvii’s filing shows the scale of China’s ambitions in artificial intelligence and how they could influence the use of surveillance technologies like facial recognition around the world. The company is one of four Chinese AI startups specializing in facial recognition valued at more than $1 billion, qualifying them as unicorns in Silicon Valley-speak. Now, the companies are looking to expand overseas, with help from public markets.

“These companies have benefited from China’s government making it a national priority to be the world leader in AI,” says Rebecca Fannin, author of the forthcoming Tech Titans of Chinaand two previous books about China’s tech scene. That support has led to contracts and freed up government and private funds, she says. “Now you are starting to see these companies go global.”

Freedom House, a US-government-backed nonprofit, warned in a report last October that Chinese surveillance deals also export the country’s attitudes to privacy and could encourage companies and governments to collect and expose sensitive data. It argues that companies and products built to serve government agencies unconcerned about privacy are unlikely to become trustworthy defenders of human rights elsewhere, and can be forced to serve Chinese government interests.