Chinese Chipmakers Become Billionaires Without Turning a Profit

Shanghai Enflame Technology Co., a Chinese computer chip manufacturer, has become a billionaire without turning a profit since its inception in 2018. The company, with fewer than 900 employees and one major customer, never turned a profit despite being backed by heavy investments from AI enthusiasts. Its founders, Zhao Lidong and Zhang Yalin, are among several Chinese executives who have amassed vast wealth through initial public offerings of AI-related firms, even as their companies face losses.

Enflame's shares surged by up to 234% on their first day of trading in Shanghai, increasing Zhao and Zhang's individual fortunes to $2.5 billion each. The company's biggest shareholder and client is Tencent Holdings Ltd., which holds a 20% stake and generated nearly 84% of Enflame's revenue in 2025. Despite the company's heavy focus on research and development, Enflame posted a net loss of 1.16 billion yuan ($160 million) in 2025.

The company's decision to focus on alternative chips, rather than direct competition with Nvidia's general-purpose graphics processing units, is seen as a high-risk strategy for strategic independence.