Moore Threads Technology, a Chinese graphics processing unit (GPU) company established by an experienced professional fromNvidiaIts China operations have emerged as one of the most closely monitored semiconductor companies in the nation, as local AI chip developers strive to challenge the US chip leader.
A company based in Beijing recently obtained approval from the Shanghai Stock Exchange for its initial public offering (IPO). It only took 88 days from when the application was submitted in June until it was approved, marking it among the quickest processes to secure permission to list on the Nasdaq-like Star Market.
The accelerated schedule represents the most recent indication of China's increased focus on achieving independence in chip production, which is essential for developing AI models, as the US-China technological conflict escalates and threatens Nvidia's sales prospects in the region.
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"Moore Threads' swift IPO process indicates that the local GPU sector is moving into a pivotal phase," noted Zhang Xinyuan, an analyst from the Beijing-based research institute Kefangde.
The listing, which Moore Threads anticipated would generate 8 billion yuan (US$1.12 billion), would greatly speed up the widespread commercial use of the company's GPUs, Zhang noted.
The narrative behind Moore Threads is led by James Zhang Jianzhong, the company's founder and CEO. He had a 14-year tenure at Nvidia, where he served as vice-president and managed its China operations. He departed in 2020 to establish his own business.
Zhang, a computer science graduate from Nanjing University of Science and Technology, began his career at Nvidia in 2005 and played a key role in the company's growth within the mainland market over the years. Prior to joining Nvidia, he held positions at American technology firms such as HP and Dell.
Zhang's background instantly boosted Moore Threads' reputation. Several of the startup's initial hires previously worked at Nvidia and its American competitor, Advanced Micro Devices. The company also secured prominent investors such as GGV, Sequoia China, ByteDance, and Tencent Holdings.
These connections enabled the firm to expand rapidly, securing hundreds of millions in venture capital and achieving a valuation in the billions before the introduction of stricter US technology restrictions.
Comparable to peers such as Huawei Technologies and Cambricon Technologies, Moore Threads also faced US sanctions. In October 2023, it was placed on Washington's Entity List, alongside another Chinese AI chip startup, Biren Technology.
Being blacklisted limited the two start-ups' ability to access specific foreign technologies and increased uncertainty regarding their future strategies.
Moore Threads initially faced challenges due to the sanctions. A month after being placed on the list, the company announced staff reductions and an internal reorganization to concentrate more on GPU development.
Nevertheless, founder Zhang kept motivating the team to tackle challenges.In a confidential memo at the time,He mentioned that the layoffs were a difficult but essential choice for the company's growth.
He dismissed the idea that it was "a period of darkness" for China's GPU progress, stating that "nothing will hinder" the company's determination to create the top general-purpose GPUs in China.
Two years on, the company demonstrated its ability to experience swift revenue increase by leveraging a local supply chain, capitalizing on the rising demand for AI processing power.
In 2024, Moore Threads disclosed revenue of 438.5 million yuan, achieving an annual compound growth rate exceeding 200 percent over the last three years, as stated in its prospectus.
The company has introduced four generations of GPU architecture: Sudi, Chunxiao, Quyuan, and Pinghu. The most recent version, released in 2024, is capable of supporting the training and inference of AI models with trillions of parameters and can be utilized for pre-training advanced large language models such as those developed by DeepSeek, according to the statement.
Nevertheless, the company has still not achieved profitability due to its research and development costs and inventory expansions. It reported a net loss of 1.5 billion yuan in 2024, down from 1.7 billion in the previous year.
Similar to other Chinese semiconductor firms, Moore Threads faces a gap compared to the US in terms of single-chip performance, software development, and challenges in wafer manufacturing.
All eyes are on whether Moore Threads will become a key hardware supplier for DeepSeek, the Hangzhou-based AI start-up that shocked the global tech community earlier this year with its cost-efficient, high-performance models.
Following the launch of DeepSeek's R1 in January,Moore Threadshurried to demonstrate its dedication to the local AI model.
"In an effort to advance the growth of the local AI ecosystem, Moore Threads will make its exclusive KUAE GPU intelligent computing cluster available, providing complete support for the distributed deployment of DeepSeek's V3 and R1 models," the company stated, highlighting its comprehensive solution for AI data centers built around its own chips.
When DeepSeek released its V3.1 AI modelIn August, the company announced it was implementing a new data format known as "UE8M0 FP8 scale," intended for "custom chips that will be launched soon." The announcement led to extensive speculation about which Chinese company might provide the AI chips.
Moore Threads, alongside Huawei, Cambricon, and the Shanghai-based AI chipmaker MetaX, were listed as companies possessing chips that can support FP8, according to Su Lian Jye, chief analyst at research firm Omdia.
During a lecture at theWorld Artificial Intelligence ConferenceIn July, Wang Hua, vice-president of Moore Threads, stated that the company was focusing more on the FP8 architecture.
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This piece was first published in the South China Morning Post (www.scmp.com), a top news outlet covering China and Asia.
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