When your well-curated story fails to woo investors, what else can you do?
That is a question that AI titan SenseTime (商汤科技, HK:0020) is desperate to answer, in a bid to brighten its commercialization prospects and win over increasingly bored investors.
Chinese media reported that since SenseTime joined the race to produce an equivalent of ChatGPT, its share prices have gone in the opposite direction to industry leaders like Baidu.
Instead, as of early May, SenseTime shares had slumped about 38% from their peak at the time of its stated GPT ambitions, with large shareholders regularly cutting stakes in the firm.
This has cast a shadow over SenseTime’s monetization plan.
Recently, SenseTime seemed to have struck on a new way out of its stock market woes by venturing beyond smart city, healthcare, government affairs and finance — typical application scenarios of its technologies — into consumer-grade AI products.
In August last year, it released an AI-powered Chinese chess-playing robot named SenseRobot.
The desktop robot, combining chess techniques and AI algorithms, is said to be capable of replicating real human moves in a Chinese chess game.
Chinese chess dates back 2,000 years and is played by two persons. It involves moving the pieces in a straight line or diagonally around a chessboard to corner and capture the opponent’s.
As in international chess, the board in the Chinese game has 64 squares but is divided by a river in the middle into two opposing territories.
Through immersive interaction, the robot seeks to stimulate children’s passion for the ancient game, said SenseTime.
The device basically functions like this: The player needs to first choose the modes of playing depending on his or her level.
After the game starts, the antenna mounted on the top of the robot will train a camera on the player, identifying activities on the chessboard and analyzing changes of the pieces.
Based on a built-in customized algorithms, the robot is able to predict the next moves of its human opponent. Its central “brain” then guides a robotic arm to grab a piece and place it on the right spot of the chessboard.
SenseRobot contains various modes of gameplay to choose from, including engame, beginners’ primer, leveling-up challenge, and duel.
SenseTime said this gadget has been certified and approved by China Xiangqi Association for use as an instructor on rules of the game and its history. Xiangqi is the pinyin spelling of chess.
In addition, it also can function as an officially recognized judge to grade players on a scale of 16 to 13. Chinese chess has 20 grades, from beginner to grandmaster.
In order to increase the safety of its device, SenseTime also put the chess robot to multiple tests on collision and pressure, so as to ensure it won’t cause any physical harm to the user, Shen Hui, a senior executive at SenseTime, told media last year.
As the first-ever consumer-grade AI product, SenseRobot has captured the imagination of many, who are curious about the market appeal of these gizmos.
SenseRobot is available in two versions, Pro and Standard, which carry a sticker price of 2,499 yuan (US$353) and 1,999 yuan, respectively.
In the absence of sales figures, e-commerce data might provide a glimpse into how the new gadget has fared in the market.
The company sold an average of over 100 units of SenseRobot each month via its Tmall store. Its sales on JD.com, another major online shopping site, has topped 2,000 so far.
Aside from distributing through online channels, SenseTime has been eyeing a much more immense market by partnering with education authorities.
Media reported yesterday that it had set up a “SenseRobot AI Chess Education Base” at Guangdong Science Center in Guangzhou, the provincial capital, with a vision to popularize the business model of “AI + chess education,” promote traditional culture and STEM education — and court more buyers for its robot.
Going foward, SenseTime said it will work closely with Guangdong Science Center to explore more ways and practices to improve the market appeal of the AI-driven game and bring it to more schools and communities.
Incomplete market data show that China has tens of millions of Chinese chess players. In 2021, China produced 3.24 million Chinese chess sets, up 11.72% over 2020. The number was expected to reach 3.48 million in 2022, market intelligence reveals.
Nonetheless, the once popular game in China is facing enormous difficulty in captivating and getting a younger population hooked on it. It struggles to vie for their attention with take-home assignments, after-school tutorials, sports, art and video games.
SenseRobot’s primary customer base is no doubt children. Admittedly, the market size is huge, but SenseTime has a myriad of hurdles to surmount if its product is to achieve mass-market adoption.
A crucial step would be to tap deeply into the needs of public and private schools as well as extracurricular tutorial service providers. Partnering with them could help drive sales through economies of scale and word-of-mouth marketing.
But it takes time to find out if this approach will work, and to what extent it will work.
So now may not be a good time to set sights on more aggressive targets, such as branching out into other boardgames like Go.
Somehow, Chinese media reported in April that SenseTime may debut another robot capable of playing Go at the end of June this year.
A move that could level up its game, but will SenseTime’s investors have the patience for it to score better this time?