&imwidth=800&imheight=600&format=webp&quality=medium "Nvidia rival Enflame soars 200% in China debut as investors pile into AI chip stocks")
China's AI chip race has produced another explosive stock-market debut. Tencent-backed Enflame surged roughly 200% on its first day in Shanghai, with investors betting that the company can help build a domestic alternative to Nvidia.
Enflame opened at 410 yuan, compared with its IPO price of 142.18 yuan, and later traded around 430 yuan. That pushed its market value to about 185 billion yuan, roughly three times its IPO valuation.
The enthusiasm was visible even before trading began. Enflame's online IPO portion attracted orders for 6,109 times the shares available, forcing the company to move additional shares into the retail allocation. More than seven million investor accounts took part.
China’s Nvidia challengers are gaining momentum
Enflame is one of China's so-called “four little GPU dragons”, alongside Moore Threads, MetaX and Biren Technology. All four are trying to build AI accelerators that can reduce China's dependence on foreign chipmakers such as Nvidia. That effort has become more urgent as US export controls restrict China's access to advanced AI processors. Beijing is also pushing technology self-sufficiency, giving domestic chipmakers a major strategic opportunity.
Enflame plans to use money from its 6.12 billion yuan ($912 million) IPO to develop its fifth- and sixth-generation AI chips and related technology.
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Investors are betting on a much bigger AI market
The optimism comes despite Enflame still losing money. Its revenue reached 990 million yuan in 2025, up 37% from the previous year. However, it recorded a net loss of about 1.2 billion yuan.
The company expects to reach break-even or profitability in 2026 or 2027.
There is another important factor: Tencent is both Enflame's biggest shareholder and its largest customer. Tencent will hold about 17.95% after the IPO, while it accounted for 83.79% of Enflame's 2025 revenue. The surge shows how strongly investors are backing China's AI hardware ambitions. But Enflame and its peers still face a difficult test: turning enormous market expectations into chips that can genuinely compete with Nvidia's technology and ecosystem.
