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Chinese AI chipmaker Enflame, which has recorded deep losses since its founding as it pours money into chip development, surged more than 200% in its Shanghai trading debut Friday, extending a wave of investor enthusiasm for domestic semiconductor companies.
The company raised 6.1 billion yuan ($912 million) through the IPO on Shanghai's technology-focused STAR Market at an offer price of 142.18 yuan. It opened at nearly three times that price, at 410 yuan, before climbing as high as 475 yuan and later easing to around 400 yuan.
The company's market capitalization touched roughly 204.4 billion yuan at its intraday peak and eased to around 175.6 billion yuan as of 10:17 a.m. GMT+3.
Enflame is one of China's so-called "four little GPU dragons," alongside Moore Threads, MetaX and Biren Technology. It is the last of the four to go public, following sharp gains by its peers on their market debuts.
MetaX soared nearly 700% on its first trading day in December, while Moore Threads gained more than 400% and Biren jumped 76% in its January IPO. Enflame also drew strong demand, with its initial retail offering attracting orders for more than 6,000 times the shares available before additional shares were reallocated to retail investors.
The strong demand comes as investors bet that Chinese AI chipmakers can gain ground on foreign suppliers in a market still dominated by Nvidia and other international companies. International chipmakers accounted for nearly 60% of China's AI accelerator market in 2025, according to IDC data cited in Enflame's prospectus.
Tencent is Enflame's largest shareholder, holding an 18% stake after the offering, and was also its biggest customer before the listing. The two companies began working together in 2019, progressing from small-scale testing to broader validation and regular bulk orders, with Enflame's products now deployed across Tencent's AI business.
More than 80% of Enflame's AI accelerator-card and module revenue during the reporting period came from inference products.
The company describes its strategy as "training products gradually exploring, inference products rapidly advancing." Its fourth-generation L600 supports both training and inference, but had returned from wafer production and had not yet entered large-scale mass delivery as of the prospectus signing date.
Enflame is working with customers on large-model training applications, but its products have yet to achieve broad deployment in AI large-model training.
Enflame's revenue rose from 301.2 million yuan in 2023 to 722.4 million yuan in 2024 and 990.2 million yuan in 2025, a compound annual growth rate of 81.3%.
Yet the company remains deeply unprofitable, reporting net losses of 1.6 billion yuan, 1.5 billion yuan and 1.2 billion yuan, respectively, after deducting nonrecurring items. Accumulated uncovered losses reached 4.4 billion yuan at the end of 2025 on a consolidated basis.
Enflame forecasts revenue of 2.3 billion yuan to 3 billion yuan for the first nine months of 2026, with a net loss of 700 million yuan to 860 million yuan. It expects to break even or turn profitable in 2026 or 2027, depending on revenue growth and margins.
The losses reflect the high cost of developing successive generations of AI chips and supporting software. The prospectus cites advanced wafer manufacturing, packaging and testing, rapid product iterations, continuous software development, adaptation to changing AI models and joint development with supply-chain partners as major drivers of R&D spending.
Enflame also works with major internet companies to validate and optimize successive generations of products before deploying them at scale, while its revenue has yet to cover its fixed R&D costs.
Rapid changes across AI architectures, algorithms, manufacturing, packaging, memory, interconnects and software ecosystems add another risk. The company warns that choosing the wrong technology direction could leave its heavy R&D investments without the expected returns.
Most of the IPO proceeds will fund its fifth- and sixth-generation AI chip series, related software and large-scale computing systems. The projects will require substantial additional R&D, depreciation and amortization as Enflame develops its next-generation products.
The debut adds to a string of blockbuster Chinese tech IPOs, with chipmaker CXMT soaring nearly 466% in its Shanghai STAR Market debut in July to become the most valuable China-listed company.
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