Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Moore Threads has surged fivefold in its market debut as investors bet the Chinese artificial intelligence chipmaker will benefit from Beijing’s drive to reduce the country’s reliance on Nvidia.
The Beijing-based company raised Rmb8bn ($1.1bn) in its listing on Shanghai’s tech-focused Star Market on Friday, marking the second-largest mainland initial public offering this year.
Shares of mainland Chinese chipmakers and chip designers have soared this year as investors bet on Beijing’s efforts to create a local supply chain for components crucial to the AI boom.
Washington has barred Nvidia from selling its most advanced AI processors in China, while Beijing has instructed its tech companies to transition away from the products.
Founded in 2020 by Zhang Jianzhong, a former senior Nvidia executive in China, Moore Threads is viewed as a second-tier domestic chipmaker, lagging far behind Huawei and chip designer Cambricon in market share.
Analysts at Bernstein estimate Moore Threads will sell $58mn worth of chips this year, compared with roughly $10bn each for Huawei and Nvidia.
By 2026, Huawei’s sales are forecast to rise to $12bn, representing about half of China’s AI chip market, while Moore Threads is projected to generate $93mn.
Nvidia’s China sales are expected to plunge to $2bn next year, with its market share sliding from 40 per cent in 2025 to 8 per cent amid Washington’s curbs.
Lawmakers are debating whether to allow Nvidia to sell its less advanced H200 chips in China, with advocates of the move arguing the US should keep Chinese tech companies dependent on American technology to entrench its leadership in AI.
The lossmaking Moore Threads secured fast-track approval to list after regulators this year eased profitability requirements for companies seeking to float on the Star Market, in an effort to boost capital raising for strategic sectors.
The company, backed by venture capital firm HongShan, formerly Sequoia Capital China, designs graphics processing units, initially for gaming but now adapted for training large language models used in AI — a trajectory mirroring Nvidia’s.
By contrast, Huawei and Cambricon primarily develop application-specific integrated circuit chips, which were originally optimised for narrower computer vision applications before being re-engineered for generative AI work.
There has been a shortage of Chinese-made AI chips this year because of constrained capacity at domestic plants.
Moore Threads was added to the US entity list in October 2023, cutting off its access to Taiwan Semiconductor Manufacturing Company, which produces most of the world’s AI chips.
The company has since moved manufacturing to mainland Chinese contractor Semiconductor Manufacturing International Corporation, which has lower chip yields and more expensive production processes.
Moore Threads is the first in a series of AI chipmakers expected to go public in either Hong Kong or mainland China. MetaX recently won approval to list on Shanghai’s Star Market. Biren and Enflame are also planning to go public in Hong Kong.
