China’s MetaX Sees Significant Gains on Shanghai Debut

Shares in MetaX, a Chinese company specializing in high-end chips for artificial intelligence systems, surged over 750% on its debut in Shanghai. This significant increase is attributed to hopes that China may challenge US-based Nvidia, a dominant player in the industry. MetaX’s initial public offering raised $585.8 million, with shares initially priced at 104.66 yuan ($14.86) and later soaring to 895.00 yuan before settling at 730.34 yuan.

This development comes less than two weeks after another Chinese chipmaker, Moore Threads, experienced a 425% increase following a $1.1 billion initial public offering. Both companies produce advanced graphics processing units (GPUs) that are crucial for running and training artificial intelligence tools. The GPU sector is currently dominated by Nvidia, which has seen tremendous growth due to global demand and optimism about AI.

Analysts believe that investors are drawn to the potential of China’s chip industry eventually rivaling that of the US. China and the US are competing for dominance in AI, with Beijing encouraging the use of homegrown chips due to Washington’s export restrictions on high-end Nvidia models. However, a recent agreement between US President Donald Trump and Chinese counterpart Xi Jinping will allow Nvidia to export its advanced H200 chips to China, albeit with some limitations.

The export restrictions were initially imposed in 2022 over national security concerns, including the potential for the Chinese military to gain a technological advantage over the US. According to Rui Ma, founder of the Tech Buzz China newsletter, these restrictions have created a protected high-end segment for chips in China, combined with policy support and deeper capital pools. This has resulted in favorable conditions for domestic GPU and AI accelerator companies, drawing significant investor interest to firms like Moore Threads, Cambricon, MetaX, Biren, and Enflame.

The significant gains experienced by MetaX and Moore Threads reflect the growing interest in China’s chip industry and its potential to challenge US dominance. As the competition between China and the US in the AI sector continues, the development of homegrown chips is likely to remain a key area of focus for Beijing. With the recent agreement allowing Nvidia to export certain chips to China, the industry is likely to see further developments in the coming months.