Shares in Chinese Nvidia challenger surge on debut

By Rebecca BAILEY and Katie FORSTER in Tokyo
Shanghai (AFP) Dec 5, 2025

Faith in the future of China's homegrown AI chip industry sent shares in semiconductor company Moore Threads rocketing more than 500 percent on its market debut Friday, having raised $1.1 billion in its initial public offering.

The company makes advanced processors, which are used to train and power artificial intelligence that investors hope can fill a gap left by US behemoth Nvidia's forced absence from the country.

Moore Threads, which priced its IPO at 114.28 yuan ($16.15) a share, surged 502 percent to 688 yuan in early trade before easing back to end the morning around 420 percent higher. The offering saw orders exceed supply by more than 4,000 times.

Nvidia dominates the global market for graphics processing units (GPUs), which are in huge demand because of frenzied excitement over AI -- positioning the California-based firm as the world's most valuable company.

However, the United States has blocked it from exporting top-end chips to China over national security concerns, such as the risk of giving Beijing a military advantage.

In response, China is pushing its tech firms to use domestic alternatives, effectively driving Nvidia out of the Chinese market.

"The noise is real, but so is the signal: this IPO has become a barometer for faith in China's next-gen AI?chip ambitions," said Dilin Wu, research strategist at Pepperstone, ahead of the Moore Threads IPO.

"Investors are buying into the story of China building a serious homegrown GPU amid global supply constraints," she said.

"But the frenzy shows that a lot of the excitement is also about being first in line for a potential breakout."

- Local champions -

Moore Threads is one of a small group of Chinese companies working to develop domestic GPU alternatives, Rui Ma, founder of the Tech Buzz China newsletter, told AFP.

It "is an important participant, but I wouldn't say the frontrunner", especially compared with the larger Cambricon, she said.

Still, the IPO on the tech-focused STAR market raised about eight billion yuan ($1.1 billion), valuing the company near $7.6 billion, according to Wu.

"Any company positioned as a potential local GPU champion, or (that) can be mentioned in the same breath as Nvidia naturally attracts attention," said Ma.

Moore Threads' founder is the former head of Nvidia in China, adding to the buzz.

But experts say it is unlikely Chinese companies will catch up to Nvidia within the current decade.

Challenges include competing to create AI chips' complex high-bandwidth memory and packaging, and upgrading ultra-precise manufacturing tools.

Ma said, however, that many domestic companies are focused on the Chinese market, which is "substantial on its own".

Cambricon's share price has more than doubled over the past year, and Bloomberg News reported on Thursday that it planned to more than triple its production of AI chips in 2026.

BUt "there is a real risk of bubble-like dynamics in Chinese chip shares", Pepperstone's Wu warned.

"Similar to global AI chip plays, overhyped valuations can lead to sharp corrections if earnings or product launches fall short."

kaf-reb/dan

NVIDIA