The name Enflame may not ring a bell yet. But it is very likely that in the coming months it will end up giving us a lot to talk about. And this Chinese AI chip company just got the go-ahead to go public on the STAR market in Shanghai, the preferred market for the country’s large technology companies. After this, we see how the scheme of large chip manufacturers begins to take shape. Enflame enters the select group of the four big technology companies that are dedicated to AI chipsand that are already listed or are about to do so on the public markets.
Who is Enflame and where does it come from? The company was founded in Shanghai in 2018 by Zhao Lidong, an engineer who came from AMD, where he led the development of high-performance processors at the American company’s R&D center. Together with his co-founder Zhang Yalin, Zhao set out to replicate that knowledge in Chinese territory and build a domestic alternative to Nvidia.
In seven years has developed five AI chips distributed across four generations of architecture, and has built a catalog that includes processors, accelerator cards, computing clusters and software platforms. Its most recent chip, the L600 module, has passed silicon verification testing, although it has not yet entered large-scale commercial production.
Why this IPO matters. Enflame plans to raise up to 6 billion yuan (about 888 million dollars) selling between 10% and 15% of its shares. The money, as could not be otherwise in these times, will be used to accelerate the development of its next generation of AI chips in the cloud and build the software that surrounds them.
However, the operation also has a certain symbolic character, since it is the fourth and final addition to the group known as the “four little dragons” of Chinese chips. The other three (Moore Threads, Biren Technology and MetaX) have already debuted on the STAR market, and have been received enthusiastically by investors. In fact, Moore Threads, nicknamed “the Chinese Nvidia”, rose 425% on its first day of trading in December of last year, according to Bloomberg.
Restrictions. The reason China is betting so big on these manufacturers is that the United States has been applying restrictions on chip exports for years advanced towards the Asian giant. Nvidia’s most powerful models are blocked, which has created a real shortage in the Chinese market and a strategic urgency to develop its own alternatives.
Beijing has responded with public moneyincluding a relaxation of STAR board rules to allow loss-making companies to list, and a $295 billion plan to build data centers that do not depend on American chips. In this framework, Enflame and its groupmates become part of an infrastructure of technological sovereignty.
What does it look like? Tencent. Enflame’s greatest asset is also its greatest vulnerability. Tencent owns about 20% of the company and in 2025 it represented 84% of its income, compared to 38% the previous year. That is, almost everything that Enflame sells is bought by Tencent. The Chinese tech giant uses its chips to power large-scale data centers, recommendation systems, chatbots and generative AI infrastructure. The company itself acknowledged in its IPO prospectus that “Tencent’s demand has far exceeded its supply capacity.”
That’s good in the short term, as it guarantees income. But how they point out In The Next Web, a chip maker that relies on a single customer for the majority of its sales ends up being exposed if that customer changes priorities.
The numbers. Enflame is growing at breakneck speed, as revenues have multiplied a compound rate greater than 80% between 2023 and 2025, but still in losses. Net losses were reduced to 1.2 billion yuan in 2025, compared to 1.5 billion the previous year, and the company plans to close the first half of 2026 with losses of about 600 million yuan. For the same period, it expects its revenue to grow more than three times compared to the previous year, reaching between 10.6 billion and 11.5 billion yuan.
On the other hand, investment in R&D has exceeded 100% of sales over the last three years, which says a lot about the phase the company is in (still building, not harvesting). Before the IPO, the Hurun Index valued the company at around $2.8 billion.
Where Enflame fits in. Not all dragons are the same. Within China, Enflame competes in a market where Huawei and Cambricon They continue to be the benchmarks in the sector and are already profitable. Enflame, Moore Threads, Biren and Iluvatar CoreX make up a second, younger layer that is trying to break through. Technically, Enflame has opted for application-specific integrated circuits (ASICs), a more specialized architecture, rather than the general-purpose GPUs used by Moore Threads or Biren.
Xu Dawei, of Jintong Private Fund Management in Beijing, points out Bloomberg that Enflame “benefits from solid comparatives,” given that its Chinese competitors are already listed on the stock market with valuations well above what their revenues would justify. Companies like ByteDance are actively looking for domestic alternatives to Nvidiaand second-tier manufacturers, including Enflame, are on the radar.
Cover image | Enflame
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