China’s Nvidia wannabe, Tencent-backed AI chip start-up EnFlame, flags IPO intention

The Shanghai-based unicorn has begun the so-called tutoring process, compulsory for IPO applicants in China

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Enflame products on displayed at the World Artificial Intelligence Conference in Shanghai in July. Photo: Che Pan

Published: 5:00pm, 28 Aug 2024Updated: 3:59pm, 25 Sep 2024

Tencent Holdings-backed Chinese artificial intelligence chip start-up Enflame has kicked off the “tutoring” process with an investment bank ahead of a planned initial public offering (IPO).

The Shanghai-based unicorn – which was valued at US$1.65 billion last September, according to venture deal tracker Pitchbook – has hired China International Capital Corporation, one of the country’s biggest investment banks, to coach company executives on IPO-related issues, the China Securities Regulatory Commission (CSRC) announced in a statement on Monday.

All IPO applicants in China are required to go through tutoring before filing a listing plan to regulators, a process that takes between three to 12 months. Enflame did not disclose where it plans to go public or how much it aims to raise.

Founded by two former employees at US semiconductor giant Advanced Micro Devices in March 2018, Enflame is among a group of Chinese graphics processing unit (GPU) developers hoping to take advantage of Nvidia’s absence in the country. Under US export controls, California-based Nvidia is barred from shipping its best GPUs to mainland customers.

A darling of China’s state-backed chip investment fund as well as Big Tech companies, Enflame had taken in more than US$742 million from eight fundraising rounds as of last September, Pitchbook data showed.

Tencent, its largest shareholder, put in 21.4 million yuan (US$3 million) for a 21 per cent stake, while the China Integrated Circuit Industry Investment Fund, also known as the Big Fund, owns a 5 per cent stake with an investment of 5.44 million yuan, according to business registry record provider Qichacha.