Megvii, a specialist in facial recognition, is planning the sale of shares

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Megvii

A major Chinese facial recognition provider has filed documents for listing on the Hong Kong Stock Exchange.

Megvii – the manufacturer of the Face ++ system – is one of the country's best-known artificial intelligence (AI) companies.

Earlier this year, a Western study suggested that its facial verification technology was more accurate than competing systems from Amazon and IBM.

But this comes at a time when activists are expressing concerns about the use of facial recognition for surveillance.

It was also reported that the White House was considering adding Megvii to a blacklist of exchanges, which would prevent it from using software and components of American origin.

Face cards

Face ++ has been used in consumer hardware, including:

• smartphones made by Huawei, Xiaomi and Vivo
• laptops made by Lenovo
• The mobile phone application of Didi Chuxing allows passengers to check the identity of the driver
• Smile-to-pay terminals tested at KFC restaurants by Alibaba
• the Chinese dating site Jiayuan, which offers a way to automatically find the faces to which a user is likely to be attracted according to his preferences

But he says that the bulk of his current revenue comes from "smart city" applications, which include facial recognition and other "safety management" tasks at workplaces, business establishments. Teaching and big events.

It was also reported that the technology of the Beijing-based company had been used to help carry out thousands of arrests in China and had been presented to police departments of other countries.

The technology works by first detecting faces in an image.

This then creates a pattern determined by the location of the eyes, lips, chin and up to 1,000 other key features.

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Megvii

He can then check if the pattern matches that of the owner of the device, or compare it to a larger database containing facial cards for an "unlimited" number of people provided by the customer in order to identify a subject or indicator if they look similar. to someone on a watch list.

In addition to being able to perform facial searches, the company claims that its technology can also be used to detect emotions, provide beauty scores, follow eye and body gestures, and assess the health status of the patient. skin of a person.

More recently, the company announced a partnership with an Austrian company, Ams, to begin offering facial recognition by 3D depth detection.

In addition, he released Hetu – an operating system for warehouse robots – which, he says, is already being used by Alibaba's subsidiary, Tmall.

The company said part of the proceeds from the sale of shares would be used to fund additional research.

It recorded a loss of 3.35 billion yuan ($ 468 million) in its last fiscal year and an additional loss of 5.2 billion yuan for the first six months of this year.

But his field of expertise makes him a standard-bearer of the Chinese government's ambition to surpass the United States and become the leading innovator of AI by 2030.

It was valued at about $ 4 billion in May.

Floor lamp with plumb head

Megvii has not publicly disclosed the amount of his intention, but the Reuters news agency said the operation was aimed at raising between $ 500 and $ 1 billion.

The company's Chinese-language prospectus, however, lists a long list of possible risk factors, including:

• other tariffs between the United States and China or even a total "trade war"
• the possibility of the United States imposing "severe restrictions" on its trading partners, similar to those that Huawei was already facing
• "the uncertainty of the Chinese legal system", which can make it difficult to ensure compliance with the country's rules

In addition, he adds that he could be damaged by "rumors" about the misuse of his AI technology.

This has been interpreted by some as referring to the fact that earlier this year, Human Rights Watch claimed to have evidence that Face ++ was used as part of efforts to suppress Uyghur Muslims in China. The campaign advocacy group subsequently withdrew the allegation and issued a correction.

Megvii is also faced with the fact that facial recognition is an increasingly controversial topic.

In Hong Kong itself, protesters demanded the removal of so-called smart street lights, fearing that they would only be used to carry out facial identity checks. Last weekend, images were shared on social media from one of these structures being cut with an electric saw.

The Financial Times announced that the EU is planning new regulations to restrict the use of facial recognition and ensure that citizens are aware of its deployment, even though the subject has already been addressed in the general regulation on Data Protection (RGPD) recently introduced.

And in the United States, three cities have banned federal agencies from using technology, while Senate and congressional politicians are considering new laws to limit its use by government and commercial agencies.