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topicnews · August 28, 2024

China’s Nvidia wannabe, Tencent-backed AI chip startup EnFlame, announces IPO intention

China’s Nvidia wannabe, Tencent-backed AI chip startup EnFlame, announces IPO intention

Tencent Holdings-backed Chinese AI chip startup Enflame has begun a “tutoring process” with an investment bank ahead of a planned initial public offering (IPO).

The Shanghai-based unicorn – which was valued at $1.65 billion last September, according to venture deal tracker Pitchbook – has hired China International Capital Corporation, one of the country’s largest investment banks, to advise the company’s management on IPO-related issues, the China Securities Regulatory Commission (CSRC) said in a statement on Monday.

All IPO applicants in China must complete a tutoring process before submitting an IPO plan to regulators, a process that takes between three and 12 months. Enflame has not disclosed where it plans to go public or how much money it plans to raise.

Founded by two former employees of the US semiconductor giant Advanced micro devices In March 2018, Enflame was part of a group of Chinese graphics processing unit (GPU) developers who wanted to take advantage of Nvidia’s absence in the country. Due to US export controls, the California-based company Nvidia excluded from delivering its best GPUs to customers on the mainland.

Enflame, a darling of China’s state-backed chip investment fund as well as major technology companies, had raised more than $742 million in eight funding rounds through last September, according to data from Pitchbook.

Tencent, its largest shareholder, invested 21.4 million yuan ($3 million) for a 21 percent stake, while the China Integrated Circuit Industry Investment Fund, also known as the Big Fundowns a 5 percent stake with an investment of 5.44 million yuan, according to trade registry provider Qichacha.

Co-founders Zhao Lidong and Zhang Yalin, who control the company and have signed an agreement to operate together, hold 32.5 percent of the voting rights, according to the CSRC statement.

Chinese chip designers are under increasing pressure from investors to offer an exit route as withdrawal channels have been significantly restricted in recent years and venture capital in the country has dried up. amid geopolitical tensions and economic headwinds.
Enflame – together with his rivals Iluvatar Corex, Moore threadsBiren Technology, Huawei Technologies“Ascend” – aimed at mainland companies looking for domestic alternatives to foreign chips.
“China’s computing clusters are shifting from being dominated by foreign GPUs to being a combination of Chinese and foreign GPUs,” said Li Xingyu, Chief Ecosystem Officer at Enflame. told an audience at the World Artificial Intelligence Conference in Shanghai in July. He added, however, that much of China’s computing power is still unused due to a lack of demand.
Enflame, which relies on outside manufacturers to produce its designs, is not currently on the US trade blacklist. This means that the company can use the services of leading global foundries such as Taiwanese semiconductor manufacturing company.

However, the start-up still had to revise its chip designs downwards to ensure production at the Taiwanese giant, according to a Reuters report in June, citing unnamed sources.

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