Chinese AI chip startups plan $1.65 bn IPO amid US curbs

Photo: Reuters

Two Chinese companies that make computer chips for artificial intelligence want to raise a total of 12 billion yuan ($1.65 billion) by selling their shares to the public. They hope that the new U.S. rules stopping the sale of advanced chips to China will increase the need for local chips like theirs.

The two companies are Moore Threads and MetaX. Moore Threads is based in Beijing and wants to raise 8 billion yuan, while MetaX is based in Shanghai and wants to raise 3.9 billion yuan. Both companies want to list their shares on the STAR Market, which is a special part of the Shanghai Stock Exchange for technology companies.

Stay informed with the latest news. Follow DXB News Network on WhatsApp Channel 

China is working hard to build its own strong chip companies, especially for graphics processing units (GPUs). GPUs are important for AI work like machine learning. Recently, another Chinese AI chip company called Biren Technology raised about 1.5 billion yuan and is getting ready for its own stock listing in Hong Kong.

The need to build strong Chinese chip companies has become urgent because the U.S. is making it harder for China to buy top chips. In April, the U.S. stopped Nvidia’s H20 chip, which is popular in China, from being sold to Chinese companies. Last year, the U.S. also made rules that stopped Chinese AI chipmakers from using advanced factories like Taiwan Semiconductor Manufacturing Company (TSMC) to make the newest chips.

Moore Threads and MetaX said in their documents that these U.S. restrictions are risky for their business, but they also see an opportunity. Moore Threads said the U.S. rules are pushing Chinese companies to use local chips instead. The company was added to the U.S. Entity List in late 2023, which means it cannot work with TSMC anymore.

MetaX also said that because of global political issues, Chinese customers are now choosing locally made GPU chips. This helps companies like MetaX build stronger relationships with customers and suppliers in China.

Both companies design GPUs to compete with Nvidia, but they have been losing money. This is because they spend a lot on research to improve their chips. Moore Threads made 438 million yuan in revenue in 2024 but lost 1.49 billion yuan. In 2023, it lost 1.67 billion yuan, and in 2022, it lost 1.84 billion yuan.

MetaX made 743 million yuan in 2024 but lost 1.4 billion yuan. In 2023, it lost 871 million yuan, and in 2022, it lost 777 million yuan.

He Hui, a semiconductor expert at Omdia, said that Moore Threads and MetaX are top GPU companies in China. Getting money from the stock market will help them continue their research and build better chips. He also said that China’s goal to become self-sufficient in chips will help these companies grow bigger and earn more profits.

Both Moore Threads and MetaX were started in 2020 by people who used to work at big U.S. chip companies. MetaX was started by former AMD employees, including Chairman Chen Weiliang, who led AMD’s GPU product design. Moore Threads was started by former Nvidia employees, including Chairman Zhang Jianzhong, who was Nvidia China’s general manager.

These two companies compete with other Chinese chipmakers like Huawei, Cambricon, Hygon, and many new startups.