China’s AI chip firms eye $1.7 billion in IPOs amid US curbs

Two Chinese artificial intelligence chip startups are seeking to raise a combined 12 billion yuan (approximately $1.65 billion) through initial public offerings (IPOs) in Shanghai, banking on US export restrictions to drive local demand for homegrown GPUs. According to Reuters, Beijing-based Moore Threads plans to raise 8 billion yuan, while Shanghai-based MetaX is targeting 3.9 billion yuan. Both companies have filed to list on the STAR Market, the Shanghai Stock Exchange’s tech-focused board.

Betting on Beijing’s push for chip self-sufficiency

The twin IPO plans underscore China’s effort to nurture domestic GPU champions critical to artificial intelligence development. Reuters reports that demand for local substitutes has become urgent as Washington has tightened export controls. The latest US restrictions, imposed in April, ban Nvidia’s advanced H20 chips from being shipped to China.

Washington’s export curbs also prevent Chinese AI chip designers from accessing leading-edge manufacturing at foundries like Taiwan Semiconductor Manufacturing Co. (TSMC), restricting their ability to produce cutting-edge semiconductors.

Sanctions seen as both threat and opportunity

In their IPO prospectuses, Moore Threads and MetaX acknowledged US sanctions pose significant risks. However, they also pointed to the same restrictions as an opportunity to build market share. As per Reuters, Moore Threads told US restrictions on high-end GPU exports were “prompting Chinese companies to accelerate domestic substitution processes.”

The company, blacklisted by the US Entity List in late 2023, is barred from working with TSMC. MetaX noted that “geopolitical pressures are forcing relevant domestic clients to use domestically-produced GPUproducts,” strengthening local ties with suppliers and customers.

Heavy losses underline massive R&D costs

Both firms remain loss-making, highlighting the steep costs of developing competitive GPUs. According to Reuters, Moore Threads reported revenue of 438 million yuan in 2024 with a net loss of 1.49 billion yuan. Losses in 2023 and 2022 were 1.67 billion yuan and 1.84 billion yuan respectively.

MetaX generated 743 million yuan in 2024 revenue but lost 1.4 billion yuan, following 871 million yuan in 2023 losses and 777 million yuan in 2022. He Hui, semiconductor research director at Omdia, told Reuters that accessing China’s capital market is “crucial for them to continue their research and development.”

Part of Beijing’s broader chip push

The IPO bids come amid China’s intensifying push to reduce reliance on foreign technology and build a self-sufficient semiconductor ecosystem.

Reuters notes that Beijing is channelling resources to help local firms achieve the scale necessary to lower costs and compete globally. Moore Threads and MetaX design GPUs to rival Nvidia’s products but face competition from domestic peers such as Huawei, Cambricon, Hygon, and other startups.

Both firms were founded in 2020 by veterans of major US chip companies. MetaX was founded by former AMD executives, including Chairman Chen Weiliang, AMD’s former global head of GPU design. Moore Threads was founded by ex-Nvidia executives, including Chairman Zhang Jianzhong, Nvidia’s former China AI chip head.

Sector sees surge in fundraising activity

The new IPO plans follow Biren Technology, another Chinese AI chipmaker, which recently raised around 1.5 billion yuan and is preparing for a Hong Kong IPO, Reuters reports.

As US export restrictions tighten, Chinese companies are racing to develop domestic alternatives, with China’s capital markets now underlining their strategic importance by providing much-needed funding.

(With inputs from the agencies)