Beijing -- Moore Threads, the Chinese graphics chipmaker, stunned investors this week with a meteoric debut on the Shanghai Stock Exchange, its shares rocketing by over 400%. The extraordinary surge has fuelled speculation that the company could be poised for a breakthrough reminiscent of DeepSeek’s headline-grabbing ascent.

The company’s initial public offering raised nearly 8 billion yuan ($1.13 billion). The debut marks the second largest and second-most in-demand IPO in China since 2022, trailing only Huadian New Energy Group’s USD $2.7 billion listing earlier this year.

Founded in 2020 by ex-Nvidia employee Zhang Jianzhong, Moore Threads has positioned itself as a homegrown competitor in graphics processing units (GPUs) and artificial intelligence accelerators, a domain long dominated by U.S. giants such as Nvidia and AMD. The company initially targeted gaming markets but rapidly shifted its focus toward AI computing as demand for chips powering large language models and enterprise AI workloads intensified.

As geopolitical tensions continue to disrupt global supply chains, Chinese companies have increased investments in foundational technologies, particularly AI chips that support domestic cloud computing, data centres, and emerging generative AI applications. Beijing has made semiconductor independence a strategic priority, and investors have responded enthusiastically to firms aligned with that agenda.

Yet despite the strong IPO performance, Moore Threads remains unprofitable. The company reported a net loss of 724 million yuan for the first three quarters of the year. However, that figure represents a 19% improvement over the previous year, suggesting moderate progress toward narrowing losses. Revenue during the same period reached 780 million yuan, up 182% year over year.

The firm has not yet achieved large-scale market adoption and continues to face steep competition from global incumbents, but the growth numbers suggest rising customer interest, particularly from domestic enterprises seeking alternatives to foreign vendors.

Moore Threads’ ascent comes despite significant external pressures. In 2023, the U.S. Commerce Department placed the company on its entity list, restricting its access to advanced chipmaking tools and equipment.

The sanctions also constrain the company’s ability to access advanced lithography and manufacturing processes, raising questions about its long-term ability to compete on performance with Nvidia, whose GPUs remain the industry standard for AI computing worldwide.

Yet the restrictions have had an unintended consequence: Nvidia’s access to the Chinese market has simultaneously been curtailed by tightened export rules, limiting the company’s ability to sell its most advanced AI chips to Chinese clients. This has opened a window for domestic manufacturers like Moore Threads to fill the vacuum. Industry analysts say that while Chinese chips still lag behind U.S. counterparts in raw performance, they may benefit from a policy environment favouring local suppliers.

Moore Threads’ high-profile listing comes at a time when China is rapidly expanding investment in domestic semiconductor capacity, pursuing both technological independence and leadership in emerging AI sectors. Government-backed funds, provincial investment vehicles, and private capital are increasingly aligned around strategic support for homegrown chip and AI computing firms.

Moore Threads plans to deploy the capital raised from its IPO toward the development of next-generation GPUs and AI accelerators, with a renewed focus on training and inference chips tailored for large-scale enterprise and cloud workloads.