SHANGHAI—Chinese e-commerce giant

Alibaba Group Holding
Ltd.


BABA -2.93%

is leading a $600 million funding round in SenseTime Group Ltd., which makes surveillance systems using facial recognition for law enforcement and commercial applications.

The funding values Beijing-based SenseTime at more than $4.5 billion, according to a person familiar with the company. It also underscores Alibaba’s move into businesses that use artificial intelligence, the technology that underpins facial recognition.

Alibaba affiliate Ant Financial Services Group has developed a mobile-payment system based on facial recognition, and Alibaba is also using AI to develop so-called smart cities where technology is used to dispatch police, speed traffic flow and regulate other public services.

Smart cities and cloud computing are likely areas of cooperation with Alibaba, SenseTime Chief Executive

Xu Li

said in an interview.

“They have strong infrastructure capabilities to build a cloud and deliver fundamental resources, while we are may be good at building computer vision and related infrastructure,” Mr. Xu said. “The capabilities between us complement each other quite well.”

Alibaba’s Executive Vice Chairman

Joe Tsai

said in a statement his company was impressed with SenseTime’s technology that allows computers to recognize images, as well as its development of deep-learning technology, in which software mimics the way neurons in the brain process information.

Alibaba’s share in the $600 million Series C funding round wasn’t disclosed. Other investors include Singapore state investment company Temasek Holdings Pte. Ltd. and Chinese electronics retailer

Suning.com
Co.

Founded in 2014, SenseTime is among a handful of Chinese AI startups that got their start selling facial-recognition systems to local police agencies. With a vast network of surveillance cameras, China is using facial recognition to identify criminal suspects as well as to influence behavior, such as discouraging jaywalking.

The technology also has commercial applications, with some companies now using it instead of badges to grant employees access to their workplaces. Mr. Xu said SenseTime would use the new funding to focus on expanding the technology’s commercial applications and AI capabilities.

SenseTime is also developing algorithms for autonomous driving, in which it currently partners with

Honda Motor
Co.

, and is also working with Shanghai’s government to use AI to ease traffic congestion.

Write to Liza Lin at Liza.Lin@wsj.com

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via WSJ.com: Technology https://on.wsj.com/2jyWrmB

April 9, 2018 at 06:06AM