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What’s the story?
Imagine investing 114 yuan and watching it balloon to over 600 yuan by the end of the day. Sounds too good to be true? Well, that’s exactly what happened to investors who managed to snag shares in Moore Threads’ IPO last week. The Beijing-based chipmaker, often dubbed “China’s Nvidia,” saw its stock soar over 400% on its Shanghai debut, closing at 600.500 yuan—more than five times its offering price.
But here’s where it gets interesting. This isn’t just another tech IPO story. It’s a window into one of the most consequential technology battles of our time, where geopolitics, national pride, and cutting-edge AI collide. And at the center of it all is a company that’s still bleeding money, placed under U.S. sanctions, yet valued by investors as if it’s already conquered the world.
So what’s really going on here?
The chip war nobody asked for
To understand Moore Threads’ meteoric rise, we need to rewind a bit. For years, Nvidia has been the undisputed king of GPUs—the specialized chips that power everything from gaming to artificial intelligence. If you wanted to train a large language model or run complex AI computations, you turned to Nvidia. In China, the company once commanded a staggering 95% market share for advanced AI chips.
Then came the export controls. Washington, concerned about China’s military and AI capabilities, started restricting Nvidia’s ability to sell its most advanced chips to Chinese customers. First came limitations on the A100 and H100 chips. Then the restrictions tightened further. By late 2024, Nvidia’s market share in China had collapsed to virtually zero, according to CEO Jensen Huang himself.
But Beijing didn’t just sit idly by. In fact, China doubled down—not only welcoming the restrictions but actively blocking Nvidia chip imports to force domestic alternatives into the spotlight. The message was clear: if America won’t sell us chips, we’ll make our own.
Enter Moore Threads, along with a growing cast of Chinese GPU manufacturers trying to fill the Nvidia-shaped void.
Who is Moore Threads, anyway?
Founded in 2020 by Zhang Jianzhong, a former Nvidia China executive who clearly knew the playbook, Moore Threads positioned itself as China’s homegrown alternative to the American chip giant. The company is what’s called a “fabless” chipmaker—meaning it designs the chips but outsources the actual manufacturing to foundries. Think of it like being a fashion designer who sketches clothes but sends the actual sewing work to factories.
The company’s ambitions are bold. They’re developing GPUs for AI training and inference, targeting applications from data centers to autonomous vehicles. But here’s the catch: Moore Threads has lost a combined 5 billion yuan over the past three years and isn’t profitable yet. They’re operating in an expensive arms race against not just Nvidia, but also domestic rivals like Huawei’s HiSilicon, Cambricon, and newcomers like MetaX (which coincidentally is also going public around the same time).
Oh, and did we mention Moore Threads was slapped with U.S. sanctions in 2023? Those restrictions limit the company’s access to advanced chip manufacturing processes—a significant handicap when you’re trying to compete with the world’s best.
The IPO that broke records
Let’s talk numbers, because they’re absolutely wild. Moore Threads’ IPO was oversubscribed 4,000 times. Read that again. Four thousand times. Retail investors were so desperate for a piece of the action that the final allotment rate dropped to just 0.036%. To put it in perspective, your chances of getting shares were worse than getting into an elite university.
The company raised nearly 8 billion yuan (about $1.13 billion) at an IPO price of 114.28 yuan per share—the highest pricing among A-share listings this year. CITIC Securities led the offering, with BOC International Securities, China Merchants Securities, and GF Securities serving as joint book runners.
When trading began on Shanghai’s STAR Market (China’s answer to Nasdaq), the stock opened at 650 yuan—more than five times the IPO price—before settling around 600 yuan. By day’s end, Moore Threads boasted a market valuation that would make even seasoned tech investors’ jaws drop, especially considering the company’s financials.
The IPO was priced at 123 times 2024 sales. Not earnings—sales. Because there are no earnings to speak of yet.
The crowded battlefield
Moore Threads isn’t alone in this gold rush. The Chinese semiconductor landscape is getting increasingly crowded as Beijing pushes for tech self-sufficiency.
According to Bernstein Research data cited by MetaX, Nvidia and AMD held 66% and 5% of China’s AI accelerator market respectively in 2024, while Huawei’s HiSilicon grabbed 23% and MetaX about 1%. These figures highlight both the opportunity and the challenge: there’s clearly demand, but competition is fierce.
MetaX, Moore Threads’ peer going public simultaneously, set its IPO price at 104.66 yuan and aims to raise 4.2 billion yuan. Their chairman, Chen Weiliang, claims the company’s flagship C600 GPU offers performance between Nvidia’s A100 and H100 chips, with a next-generation C700 that will supposedly rival the H100 entirely using domestic supply chains.
Other players include Enflame Technology, Biren Technology, and even tech giants like Huawei and Alibaba stepping up investments in AI chip development. Baidu’s AI chip unit, Kunlunxin, is reportedly planning its own Hong Kong IPO.
And here’s where it gets really interesting: Cambricon, another Chinese AI chip company already listed on the Shanghai exchange, has seen its shares surge over 100% year-to-date. The Shanghai Stock Exchange has accepted a slew of IPO applications this year from chipmakers, signaling Beijing’s determination to build a domestic semiconductor ecosystem.
The valuation puzzle
Now comes the trillion-yuan question: how do you justify Moore Threads’ valuation?
“The price is beyond my understanding,” admitted William Xin, chairman of Spring Mountain Pu Jiang Investment Management, who wisely stayed away from the IPO. “A stock cannot defy gravity and fly into the stratosphere.”
He’s got a point. China’s SSE STAR Chip index currently trades at 118 times earnings, compared with a multiple of just 12 for the Shanghai Composite Index. That’s a massive premium, even by tech sector standards.
Wang Yapei, a Shanghai-based fund manager at Zijie Private Fund, put it more bluntly: Moore Threads’ valuation “is not based on earnings, but on dreams.”
But here’s the thing about dreams in China’s tech sector right now—they’re exactly what policymakers want. Wang continued: “But it’s the kind of froth welcomed by policymakers who hope tech firms can plough long-term money into research and development.”
And that’s the real story here.
Racing while bleeding
Abraham Zhang, chairman of venture capital firm China Europe Capital, described Moore Threads’ situation perfectly: the company is “racing while bleeding.”
The IPO gave them badly needed capital—$1.1 billion to be exact—but now they’re racing against time for technology breakthroughs and commercialization before burning through that cash. Moore Threads expects 2025 sales to jump as much as 242% to 1.5 billion yuan, which sounds impressive until you remember they’re starting from a very low base and still not profitable.
The company has said IPO proceeds will accelerate core R&D initiatives, including new-generation AI training and inference GPU chips, with a portion going to working capital. Translation: they need this money to survive and compete.
Sinolink Securities analyst Fan Zhiyuan remains optimistic, noting that “the era of AI is driving rapid expansion in GPU demand.” The brokerage set a target price of 182.25 yuan for Moore Threads—a figure the stock blew past on day one.
The geopolitical chess game
What makes this story particularly fascinating is how it sits at the intersection of technology and geopolitics. Just days before Moore Threads’ listing, reports emerged that the U.S. government was considering allowing Nvidia to sell its H200 AI chips to China—a potential policy reversal that could upend the entire domestic GPU industry that Beijing has been carefully nurturing.
Nvidia CEO Jensen Huang even met with President Trump to discuss export controls, though he declined to share details. When asked about Beijing’s stance on allowing Chinese companies to buy the H200, Huang admitted: “We don’t know. We have no clue. We can’t degrade chips that we sell to China, they won’t accept that.”
This uncertainty cuts both ways. If restrictions ease, Moore Threads and its peers face renewed competition from a technologically superior Nvidia. If restrictions tighten further, these Chinese companies get more breathing room to develop—but with limited access to advanced manufacturing processes.
So, what should we make of all this?
Moore Threads’ explosive debut tells us several things about where China’s tech industry is heading:
First, there’s genuine investor appetite for companies working on strategic technologies, even unprofitable ones. The 4,000x oversubscription wasn’t just retail frenzy—it reflected real belief that whoever cracks the GPU code in China will reap enormous rewards.
Second, Beijing is dead serious about tech self-sufficiency. The approval of multiple semiconductor IPOs, the encouragement of high valuations, and the restrictions on Nvidia imports all point to a coordinated strategy to build domestic capabilities, regardless of short-term costs.
Third, we’re witnessing the early stages of what could become a bifurcated global technology ecosystem. Just as China has its own internet ecosystem, it may soon have its own AI infrastructure stack, with domestic GPUs powering domestic AI models serving domestic applications.
But—and it’s a big but—we’re still in the very early innings. Moore Threads might become China’s Nvidia, or it might burn through its IPO cash and fade into obscurity. The company’s success depends on achieving genuine technological breakthroughs, not just riding a wave of nationalist sentiment and policy support.
The final word
Moore Threads’ 400% debut is a spectacular story of ambition, timing, and geopolitical necessity. Whether it’s a glimpse of China’s technological future or an expensive lesson in irrational exuberance remains to be seen.
For now, investors are betting on dreams. The question is whether Moore Threads can turn those dreams into reality before the money runs out and gravity reasserts itself.
As one analyst aptly put it: in the race to build China’s semiconductor future, these companies are racing while bleeding. Moore Threads just secured a massive transfusion. Now comes the hard part—actually winning the race.
