HONG KONG (Reuters) – Buoyed by China’s plans to build a ubiquitous CCTV surveillance network, Chinese and some foreign investors are pouring money into start-up technology firms that specialise in facial recognition software.
At stake for firms such as SenseTime Group, Face++ and DeepGlint, is a multi-billion dollar global public and private market for facial recognition technology that can quickly identify individuals by measuring major elements of their faces, such as the distance between the eyes and the curve of the cheekbones.
With the use of artificial intelligence (AI) the technology can recognise and track those wanted by the authorities by seeking a match from a database of photographs. In the commercial world it can be used for security at homes, workplaces and ATM machines, and as a part of payments systems at stores and restaurants.
According to estimates from IHS Markit Ltd, video surveillance – including the equipment and video management software – was a $6.4 billion market in China in 2016, with 176 million surveillance cameras already installed by the authorities or private companies.
That market, the largest in the world, is set for a compound annual growth rate of 12.4 percent through 2021, according to IHS. By comparison, the US market was estimated to be worth only $2.9 billion and growing at just 0.7 percent a year.
In China, though, the supercharged growth has added to concerns about controls on dissidents or activists by the government of President Xi Jinping, especially when combined with the potential for the Chinese authorities to track phones being increasingly used for electronic payments and their stepped up monitoring of Internet traffic.
That hasn’t appeared to deter investors, who include leading US venture capital firms such as the China arm of Sequoia Capital, which is one of the best-known Silicon Valley venture capital firms.