Biren Technology, a Chinese AI chip startup, is getting ready for an IPO in Hong Kong after raising roughly 1.5 billion yuan ($207 million) in new capital.
The fundraising round and IPO proposal coincide with China's efforts to create homegrown semiconductor substitutes in the face of growing Washington export curbs on cutting-edge devices.
Building domestic leaders in graphics processing units (GPUs), which are essential for the advancement of artificial intelligence, has been a top priority for Beijing.
According to reports, state-affiliated investors spearheaded the 1.5 billion yuan investment round.
Among the participants were a Shanghai government fund and a Guangdong province state-backed fund.
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Last year, Biren first submitted paperwork for a listing in mainland China, but it has now changed its priorities to Hong Kong, in part due to the mainland's harsher regulations, which include a lower tolerance for businesses that lose money.
As early as August, according to one insider, the company is getting ready to submit an application for a Hong Kong listing in the third quarter. It was unclear at first if Biren had hired advisors for the IPO.
Before the most recent fundraising round, Biren was worth about 14 billion yuan.
Since the U.S. has tightened export restrictions on innovative semiconductors, China has had to develop its own GPU capabilities. U.S. chip company Nvidia stopped selling its H20 AI chips to Chinese consumers as a result of the most recent measures, which were put into effect in April.
There is a sizable market for Chinese AI chip manufacturers. In a May client note, investment bank Morgan Stanley projected that local GPU manufacturers might reach 70% of the Chinese market by 2027, up from 30 percent the previous year, with sales of 287 billion yuan.
Jiao Guofang, a former employee of Qualcomm and Huawei, and Zhang Wen, a former president of SenseTime, a prominent AI face-recognition firm, are cofounders of Biren, which was founded in 2019.
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When the business originally introduced its first line of goods in 2022, including the BR100 chip, which it claimed could equal the performance of Nvidia's cutting-edge H100 AI processor, investors and industry watchers took notice.
However, the company was prohibited from using top global foundries like Taiwan Semiconductor Manufacturing to make its chips after it was added to the U.S. 'Entity List' in 2023.
Since then, Biren has seen a lot of turmoil, with co-founder Xu Lingjie among the senior executives leaving.
Several intelligent computing centers have used the company's general-purpose GPU solutions, and its partners include the Shanghai AI Laboratory, ZTE, China Mobile, and China Telecom.