Chinese chipmakers become billionaires without turning a profit

Shanghai Enflame Technology, a Chinese computer chip manufacturer, has managed to become billionaires without turning a profit. The company, founded by Zhao Lidong and Zhang Yalin in 2018, has fewer than 900 employees and only one major customer. Despite having never turned a profit, the founders have become billionaires as investors pour money into AI-related ventures.

Tencent, the biggest shareholder and client, holds a 20% stake in the firm, contributing nearly 84% of Enflame's 990 million yuan ($138 million) in revenue in 2025. Enflame's shares surged by as much as 234% on their first day of trading in Shanghai, bringing Zhao and Zhang's individual fortunes to US$2.5 billion each. The company's founders, who previously worked at AMD, sought to avoid direct competition with Nvidia by developing an alternative type of chip.

However, their strategy has been met with challenges such as supply chain bottlenecks, competition from global rivals like Nvidia, and geopolitical uncertainties. Despite posting a net loss of 1.16 billion yuan ($160 million) in 2025, Enflame continues to rely on Chinese state-backed computing projects for revenue.