China’s next play in AI race? Faster, easier IPOs

Subscribe to enjoy similar stories. Beijing’s bid for AI supremacy has been hobbled by a reliance on imported semiconductors. To fix that, it is tapping homegrown startups as it looks for the DeepSeek of chip making.

There is no shortage of promising candidates but most are unprofitable, and they will need to spend heavily to close the gap on foreign-made chips. Chinese companies’ access to advanced accelerators is a critical bottleneck, Macquarie analysts said. The U.S.

holds 75% of the world’s computational power, China has just 15%, they added, citing data from research institute Epoch AI. A reform that loosens stock-market listing rules could help local chip makers catch up, giving them access to fresh funding. “Capital markets serve as a critical lifeline" for China’s tech startups, said Terence Ho, EY Greater China IPO leader.

Regulators over the summer reopened a pathway for unprofitable startups in strategic industries to list on Shanghai’s Nasdaq-like Science and Technology Innovation Board, or STAR. The change is now starting to bear fruit. Moore Threads, dubbed by some as China’s answer to Nvidia, has been the first to go public via that route.

Shares of the Beijing-based AI-chip maker surged 425% in its debut last week, putting its market value at roughly $55 billion. MetaX, which along with Moore is in the club of “Little Dragons" seen as highly promising chip startups, will list soon as well. Though both have recorded steep losses as they invest heavily in research and development, the relaxed rules mean that even companies with zero revenue can go public.