Shares of Shanghai Biren Technology Co. jumped nearly 76% in their trading debut Friday, marking the best first-day performance since early 2021 among Hong Kong listings that raised at least $700 million.
Shares of the artificial intelligence chip designer ended at HK$34.46 after an IPO priced at HK$19.60, the high end of an indicative range. Strong investor demand helped the company raise $717 million through its IPO, with its retail share subscribed more than 2,300 times.
The developer of graphics processing units used to train and run AI models debuted amid a wave of blockbuster Chinese listings in the sector, which has become one of the hottest themes in global stock markets. In addition to growing investor interest in all things AI, China’s efforts to support local technology have also boosted confidence.
Shanghai Biren’s strong start likely bodes well for two other AI-related stocks – MiniMax Group Inc. and Knowledge Atlas Technology JSC Ltd., better known as Zhipu – which are expected to list on the Asian financial hub next week. Separately, Baidu Inc.’s AI chip unit confidentially filed for an IPO in Hong Kong on Friday.
As the first GPU-focused stock to list in Hong Kong, Shanghai Biren “enjoys scarcity value and high market attention,” according to Kenny Ng, a strategist at China Everbright Securities International Co. “The sector is in a thriving phase, with many companies striving for breakthroughs and significant growth potential.”
Shares of Shanghai Biren soared nearly 119% intraday before paring gains. Even so, the first-day closing performance was the best since Kuaishou Technology shares surged 161% in their stock market debut in early 2021. That takes into account listings in Hong Kong that raised $700 million or more.
Generally speaking, listings of this size on the financial hub between 2020 and 2025 generated a weighted average first-day gain of nearly 23%, according to data compiled by Bloomberg.
At the same time, Chinese chipmakers’ debuts on the mainland this year have been far more impressive.
Last month in Shanghai, MetaX Integrated Circuits Shanghai Co. soared 693% on its first day of trading, following Moore Threads Technology Co.’s stellar debut earlier. The companies, including Shanghai Biren, are among China’s “four little dragons” in the GPU space, seen as contenders for the market share left by Nvidia Corp’s exit.
Founded in 2019 by Zhang Wen, former chairman of SenseTime Group Inc., Shanghai Biren is gaining ground among large Chinese companies. In 2022, it claimed to have “set a new record for global computing power” with its first general-purpose GPU.
A major setback occurred just a year later when the company was added to a U.S. list of trade restrictions requiring exporters to obtain a government license before shipping their products to Biren. Washington has argued that its restrictions on chips are necessary to keep advanced technologies out of Chinese military hands.
In its prospectus, Shanghai Biren said the proceeds from the offering would be used for research and development of its IT solutions. The company posted a net loss of 1.6 billion yuan ($228.9 million) in the first six months of the year.
China’s ambitions to develop its domestic chip sector have accelerated this year in a bid to reduce its dependence on foreign players amid growing trade tensions. Officials are now considering a package of incentives worth up to $70 billion to finance the sector.
DeepSeek, a Hangzhou-based startup that stunned the industry with its R1 reasoning model a year ago, published a paper this week outlining a more effective approach to AI development, illustrating Chinese efforts to compete with OpenAI despite the lack of free access to Nvidia chips. Such DeepSeek releases have foreshadowed the release of major models in the past.
This story was originally featured on Fortune.com
