Enflame: Chinese AI Chipmaker Triples in $912 Million IPO. Watch Out, Nvidia?

Tencent-backed company received a blockbuster Shanghai debut, turning China’s pursuit of homegrown AI chips into one of the year’s hottest listings.

🔥 Shanghai debut catches fire

• Enflame Technology shares 688801 surged nearly 200% during their first session on Shanghai’s STAR Market.
• The stock was issued at 142.18 yuan, opened at 410 yuan and climbed as high as 475 yuan before trading near 400 yuan.
• The AI chipmaker raised 6.12 billion yuan, or approximately $912 million, by selling around 10% of the company.

📌 Numbers time

• Its post-listing market value reached roughly 185 billion yuan — the equivalent of about $26 billion and nearly three times its IPO valuation.
• Enflame plans to invest the proceeds in next-generation AI processors and large-scale computing systems.
• The company is developing its fifth- and sixth-generation chips, giving investors a relatively direct wager on China’s expanding market for domestically produced computing power.

🤖 China searches for its Nvidia

• Founded in 2018, Enflame designs processors used to train and operate artificial-intelligence models. It belongs to a growing group of Chinese chipmakers attempting to provide local alternatives to Nvidia’s advanced accelerators.
• That mission has become increasingly important as US export restrictions limit China’s access to cutting-edge Nvidia products and high-bandwidth memory.
• Tech giant Tencent owns 17.95% of Enflame following the listing and has also been its largest customer. That relationship supplies capital, demand and credibility, although heavy dependence on one shareholder-customer creates a risk if purchasing patterns change.

📊 Valuation races ahead of profit

• Enflame remains unprofitable. Revenue increased 37% to 990.2 million yuan in 2025, while the company recorded a net loss of 1.16 billion yuan.
• Investors seem to be valuing its growth potential rather than its present earnings — an arrangement the AI market has become rather comfortable with.
• Management expects revenue of between 2.3 billion and 3 billion yuan for the first nine months of 2026, alongside a narrower loss of 700 million to 860 million yuan. The company believes it could reach profitability in 2026 or 2027.