Enflame raises $912 million in IPO as shares close up 179%

Retail investors drove much of the demand. They ordered 6,109 times more shares than the number Enflame had set aside for them, and the company increased that allocation in response. Enflame sold a total of 43.04 million shares, about 10% of its outstanding stock.

Enflame was founded in 2018 to develop artificial intelligence chips for data centers. It introduced its first accelerator, the DTU 1.0, the following year, using 14 billion transistors manufactured on GlobalFoundries Inc.'s 12-nanometer node. The company has since developed three more iterations of its architecture. Its newest chip, the fourth-generation L600, was introduced last July and can run both training and inference workloads. It carries a 114-gigabyte memory module that delivers 3.6 terabits per second of memory bandwidth and uses HBM3 memory, a type that provides more bandwidth than standard server-grade RAM. Nvidia Corp.'s latest Rubin graphics card uses HBM4, a newer version of the technology that supplies more than twice the bandwidth of HBM3.

Revenue is growing quickly from a small base. Sales rose 37% in 2025 to 990.2 million yuan, about $147 million, and the company estimates revenue more than doubled in the first nine months of this year to between 2.3 billion yuan and 3 billion yuan. Losses narrowed 25% last year to 1.16 billion yuan, and Enflame expects to turn profitable in late 2026 or 2027. Proceeds from the listing will fund development of fifth- and sixth-generation machine learning accelerators.

Reuters reported that Shenzhen-based Tencent Holdings Inc. is Enflame's largest customer, accounting for more than 83% of the chipmaker's 2025 revenue, and its largest shareholder with a 17.95% stake after the IPO.

Enflame is the fourth Chinese AI chip developer to list in the past year, following Biren, MetaX and Moore Threads, which saw similar share price spikes after their trading debuts. All three continue to trade above their opening prices.

Nvidia's competitors outside China are also attracting investor money. AI chip startups including Positron AI Inc., Etched Inc. and Velaura AI Inc. have raised nine-figure funding rounds in recent months. Nvidia also faces competition from customers: the three largest cloud providers have all developed custom AI chips, and in June OpenAI introduced an inference accelerator called Jalapeño that it says offers better performance per watt than off-the-shelf graphics cards. Anthropic is working on custom chips as well.

Editor's Summary

Enflame's debut made it the fourth Chinese AI chip developer to list in a year, and strong retail demand left the Tencent-backed company valued at about $25.5 billion. Its revenue is climbing fast while losses narrow, though more than 83% of 2025 sales came from a single customer. The listing adds capital to a market where Nvidia faces pressure from Chinese entrants, custom silicon from cloud providers and startups raising large rounds.