Chinese AI chip developer Enflame raises $912M in IPO

Chinese AI chip developer Enflame Technology Co. saw its shares soar 179% following a successful initial public offering (IPO) that raised approximately $912 million. The company's stock allocation was in high demand, particularly from retail investors who purchased six times more shares than available in the retail segment. Enflame sold a total of 43.04 million shares, representing about 10% of its outstanding stock, after raising the allocation in response to demand.

With a closing price that set its market capitalization at 171 billion yuan ($25.5 billion), Enflame aims to develop AI chips for data centers. The company debuted its first accelerator, the DTU 1.0 in 2019, featuring 14 billion transistors made using GlobalFoundries' 12-nanometer node. Over the years, Enflame developed three more iterations of its architecture, with its latest chip, the fourth-generation L600, launched in July 2024.

The L600 chip can handle both training and inference workloads and boasts a 114-gigabyte RAM module delivering 3.6 terabits per second of memory bandwidth using HBM3 memory technology.

Enflame's revenue grew by 37% in 2025 to reach 990.2 million yuan ($147 million), and the company anticipates its revenue more than doubling in the first nine months of 2026, ranging between 2.3 billion and 3 billion yuan. The company's largest customer, Tencent Holdings Inc., accounted for over 83% of its 2025 revenue and is also its biggest shareholder, holding a 17.95% stake post-IPO. Despite narrowing its losses by 25% last year to 1.16 billion yuan, Enflame aims to become profitable by late 2026 or 2027.

The IPO proceeds will be utilized to develop fifth- and sixth-generation machine learning accelerators. Enflame joins a growing list of Chinese AI chip developers going public in the past year, including Biren, MetaX, and Moore Threads, all of which have seen their share prices rise above their opening prices. Nvidia Corp. faces competition from Chinese rivals as well as from AI chip startups such as Positron AI Inc., Etched Inc., and Velaura AI Inc., which have recently raised significant funding rounds. Major cloud providers are also developing custom AI chips, posing additional challenges for Nvidia.