China’s AI champion iFlyTek brushes off US entity list inclusion with bullish profit forecast

Jane Zhang

China’s voice recognition champion iFlyTek said it will maintain healthy growth this year despite being added to a US trade blacklist on Monday as the company announced a positive profit forecast for the first three quarters of the year.

Along with 20 Chinese public security bureaus and seven other companies, iFlyTek was added to the US Entity List which prevents them from buying US-made technology. Washington’s move was linked to Beijing’s alleged treatment of Uygur Muslims and other predominantly Muslim ethnic minorities and the involvement of the Chinese tech companies in that campaign.

iFlyTek chief executive Liu Qingfeng addressed the impact of the ban in an open letter to staff on Wednesday, saying: “We have the world's leading artificial intelligence core technology, all of which come from our independent research and development, and have independent intellectual property rights. We will not be strangled.”

On Thursday iFlyTek said it expects to report a net profit of 330 million to 380 million yuan (US$46.4 million to $53.4 million) for the first three quarters of 2019, representing year on year growth of between 50 and 73 per cent.

The profit growth mainly relied on the healthy development of its core business amid a complicated economic environment both at home and abroad, the company said in a statement.

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Liu said that being blacklisted by the US would not have a significant impact on the company’s day-to-day operations though iFlyTek will appeal to the relevant US government departments and will keep an open mind in future.

iFlyTek was named one of China’s national AI champions in November 2017. Its translation products are used in 200 countries and regions around the world and its smart education products are used by 25,000 schools, according to Liu.

“The great rejuvenation of the Chinese nation needs to use soft power such as science and technology and culture to win respect and achieve a global voice. iFlyTek people will continue to devote themselves to this historical trend with passion,” Liu said.

The ban on China’s rising national tech champions comes as Chinese vice-premier Liu He prepares to lead a delegation of high level officials for a new round of trade talks in Washington on Thursday and Friday. The next round of US tariffs on Chinese products is set to go into effect on October 15.

Other companies added to the Entity List include facial recognition start-ups Sensetime, Megvii and Yitu, video surveillance specialists Hikvision and Dahua Technology, as well as Xiamen Meiya Pico Information Co and Yixin Science and Technology Co. Hikvision, Megvii, Yitu all denounced the US blacklisting in statements earlier this week.

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