China's Biren Will Build GPUs That Can Compete with Nvidia in the Domestic Market

Nvidia is facing increasing difficulties selling its top-of-the-line chips in China due to strict export controls imposed by Washington. This situation has opened the door for local competitors to rush to fill the gap in the market. One of the most notable cases is Shanghai Biren Technology, which has raised nearly $900 million to boost production of its GPUs.

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Biren has issued new shares worth HK$7 billion (about $892.5 million) to fund its efforts. The company will issue 153 million new shares at HK$46.2 each, representing a 9.9 percent discount to Friday’s close. Biren was listed on the Hong Kong stock exchange in January and its shares have risen nearly 150 percent since then.

However, investors were more cautious this week, with shares closing 5.4 percent lower on Monday after an initial rise in morning trading.

This funding is critical for Biren, as it will primarily support the commercialization and mass production of the company’s next-generation general-purpose GPUs. 60 percent of the funds will be allocated for this purpose, while another 20 percent will be directed towards research. The remaining amount will be used for investments and working capital. It is noteworthy that the company had already spent more than 70 percent of its IPO proceeds by the end of June.

The timing of this funding is strategic, as Washington’s export controls prevent Nvidia’s most advanced AI chips from reaching Chinese customers. That has created a lucrative opportunity for domestic companies like Biren, which competes with Moore Threads, MetaX and Cambricon for the same buyers. Demand for AI computing power is strong, with cloud service providers, AI data centers and enterprise customers significantly expanding their deployments. Biren stressed the need for sufficient capital to ramp up production and fill orders in a timely manner.

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The competitive landscape is evolving rapidly. MetaX, another Shanghai-based competitor, has announced plans to list in Hong Kong, while Kunlunxin, Baidu’s chip unit, is reportedly seeking a valuation of at least 100 billion yuan (about $14.7 billion) for its own Hong Kong listing. The moves underscore the rapid growth and growing importance of Chinese companies in the technology sector.

Despite these developments, Biren’s chips are still a step behind Nvidia’s top-of-the-line products on the market. China’s most powerful AI accelerators are often custom designs from companies like Huawei. However, with limited foreign supply, demand for “good enough” and “made in China” solutions is growing, making Biren’s recent fundraising significant in light of the opportunities left by Nvidia’s absence.

Biren's strategy is not limited to filling the gap left by Nvidia, but also to developing innovative solutions that could compete on a global level. The company is investing significantly in research and development, aiming to improve the performance of its products and introduce new technologies that could reshape the market. Biren's success will depend on its ability to adapt to rapidly changing market conditions and offer products that meet the growing demands of customers.

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Biren's case is an example of a broader trend in China, where local technology companies are stepping up their efforts to meet domestic market needs and reduce reliance on foreign technologies. This phenomenon is particularly evident in the semiconductor sector, where China is seeking to strengthen its autonomy and develop a strong domestic industry that can compete internationally.