Key Points
- Two Chinese AI chip startups, Moore Threads and MetaX, plan to raise a combined $1.65 billion through IPOs.
- They believe U.S. sanctions on chip sales to China create a huge opportunity for their domestic products.
- The IPOs are part of China’s broader effort to become self-sufficient in critical technologies, such as AI chips.
- Former high-level employees from American chip giants Nvidia and AMD founded both companies.
Two Chinese artificial intelligence chip startups, Moore Threads and MetaX, are planning to go public and raise a combined $1.65 billion. The companies are betting that strict U.S. curbs on technology sales to China will force local businesses to buy their domestically made chips instead.
In filings for their Initial Public Offerings (IPOs), both Beijing-based Moore Threads and Shanghai-based MetaX highlighted the growing need for homegrown technology. This move is part of a larger push by the Chinese government to develop its own powerful “domestic champions” in the chip sector, especially for graphics processing units (GPUs), which are the workhorses behind AI development.
The U.S. has steadily tightened restrictions, recently banning the sale of some of Nvidia’s most popular AI chips to China and blocking Chinese firms from using the world’s top contract chip manufacturers. While the startups viewed these sanctions as a risk, they also described them as a significant market opportunity that would accelerate the shift to local suppliers.
Both companies were founded in 2020 by former top executives from major U.S. chip firms AMD and Nvidia. They are currently incurring significant expenses on research and development and have reported substantial losses over the past few years.
The money raised from the IPOs on Shanghai’s tech-focused STAR Market is considered crucial for them to continue their work and compete in the growing domestic market. An industry analyst noted that this funding is crucial for their R&D efforts and that China’s drive for self-sufficiency will aid their growth.
