Shanghai Enflame Technology Co. raised 6.12 billion yuan, or about $912 billion, in its initial public offering, and the Chinese AI chip developer's shares closed 179% higher on their first day of trading. Retail investors drove much of the demand, ordering 6,109 times the number of shares Enflame had set aside for them. The company expanded that allocation in response and sold 43.04 million shares in total, roughly 10% of its outstanding stock. The closing price valued Enflame at 171 billion yuan, or $25.5 billion.
Enflame was founded in 2018 to build artificial intelligence chips for data centers. It released its first accelerator, the DTU 1.0, the next year, a chip with 14 billion transistors manufactured on GlobalFoundries Inc.'s 12-nanometer node. The company went on to develop three more generations of its architecture. Its newest part, the fourth-generation L600, debuted last July and can handle both training and inference workloads, with a 114-gigabyte RAM module delivering 3.6 terabits per second of memory bandwidth.
The L600 uses HBM3 memory, which offers far more bandwidth than standard server-grade RAM. Nvidia Corp.'s newest Rubin graphics card uses HBM4, a newer version of the technology that provides more than double the bandwidth of HBM3. Enflame's sales climbed 37% in 2025 to 990.2 million yuan, or about $147 million, and the company estimates revenue more than doubled in the first nine months of this year to between 2.3 billion and 3 billion yuan.
Reuters reported that Tencent Holdings Inc. is Enflame's largest customer. The Shenzhen-based social media company accounted for more than 83% of the chipmaker's 2025 revenue and holds a 17.95% post-IPO stake, making it Enflame's biggest shareholder. Enflame's losses narrowed 25% last year to 1.16 billion yuan, and it expects to turn profitable in late 2026 or 2027. Proceeds from the listing will fund development of fifth- and sixth-generation machine learning accelerators.
Enflame is the fourth Chinese AI chip developer to go public in the past year, following Biren, MetaX and Moore Threads, which saw similar share price spikes after their debuts. All three continue to trade above their opening prices. Nvidia also faces competition from its own customers: the industry's three largest cloud providers have each developed custom AI chips. In June, OpenAI Group PBC entered the market with an inference accelerator called Jalape帽o that it says delivers better performance per watt than off-the-shelf graphics cards, and Anthropic PBC is working on custom chips as well.
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