Chinese AI chip startups plan to raise $1.65 billion

Two Chinese startups developing artificial intelligence chips plan to raise a total of 12 billion yuan ($1.65 billion) through an initial public offering (IPO). The companies expect U.S. restrictions on the supply of advanced chips to China to increase demand for their products.

The companies expect the U.S. restrictions on the supply of advanced chips to China to increase demand for their products.

Beijing-based Moore Threads aims to raise 8 billion yuan and Shanghai-based MetaX aims to raise 3.9 billion yuan, according to their IPO prospectuses. Both companies plan to list on Shanghai’s STAR Market exchange, which is focused on technology enterprises.

Their plans reflect a growing effort by Chinese chipmakers to capitalize on a government strategy to develop domestic graphics processing units (GPUs) critical to AI.

Earlier Reuters reported that another Chinese AI chip developer, Biren Technology, has raised 1.5 billion yuan and is preparing for an IPO in Hong Kong.

The development of local chip makers is becoming a priority for China amid tightening U.S. export restrictions. In April, the US banned shipments to China of Nvidia H20 chips, some of the most popular chips on the market. Restrictions have also been in place since 2023, preventing Chinese companies from accessing advanced manufacturing facilities such as Taiwan Semiconductor Manufacturing (TSMC).

Moore Threads and MetaX cited U.S. sanctions as a key risk, but said the restrictions offer new opportunities.

“The bans on exporting high-performance GPUs to China accelerate import substitution,” said Moore Threads. The company, which was placed on the U.S. sanctions list in 2023, has lost its ability to cooperate with TSMC.

MetaX also pointed out that “geopolitical pressure is forcing local customers to switch to domestic GPUs, which strengthens the ties between Chinese manufacturers and suppliers.”

The two companies are developing GPUs to compete with Nvidia products, but have been operating at a loss for the past three years due to high R&D costs.

• Moore Threads: revenue 438 million yuan (2024), loss 1.49 billion yuan (up from 1.67 billion in 2023 and 1.84 billion in 2022).
• MetaX: revenue 743 million yuan (2024), loss 1.4 billion yuan (up from 871 million in 2023 and 777 million in 2022).

“Entering the Chinese capital market is critical for the continuation of their developments,” said He Hui, an analyst at Omdia. China’s drive toward self-sufficiency in chips will help local manufacturers achieve the scale needed to grow profits, he said.

Founders and Competitors

• MetaX was created by former AMD employees, including chairman Chen Weiliang, ex-head of GPU development at the company.
• Moore Threads is founded by Nvidia natives, including Zhang Jianzhong, former head of the company’s China division.

They have to compete with players such as Huawei, Cambricon, Hygon and other localized startups.

The story Chinese AI chip startups plan to raise $1.65 billion was first published on ITZine.ru.