SenseTime Group Inc. shares plummeted after short-seller Grizzly Research released a critical report on the company’s core AI business.

The Shanghai-based artificial intelligence software developer did not immediately respond to a request for comment on the report, which alleged that SenseTime had inflated its revenue and that its core business had become unprofitable. Its shares in Hong Kong slumped as much as 9.7%, their biggest intraday drop since April.

Grizzly Research had said in September that it was also shorting PDD Holdings Inc.

SenseTime, best known as a leader in computer vision, was among the first Chinese tech firms to receive government approvals to publicly roll out its own ChatGPT-like services. The company, earlier backed by Alibaba Group Holding Ltd., listed publicly in Hong Kong in one of the most highly anticipated debuts of 2021.

Co-founded by Massachusetts Institute of Technology alum Tang Xiao’ou, SenseTime was blacklisted by the US government in 2019 on accusations related to human rights violations in China’s far-western region of Xinjiang. That has restricted its access to capital and crucial US tech components, which has been compounded in recent months by new curbs on the sale of advanced AI chips and chipmaking equipment to Chinese firms.

Alibaba and Japanese investor SoftBank Group Corp. have been whittling down their stakes in SenseTime over the past few months. China’s AI arena has seen frenzied movement of capital and talent since the launch of ChatGPT a year ago, but the sluggish domestic economy and US chips restrictions have posed high hurdles for the industry.