Iluvatar CoreX Seeks to Raise $850m as China’s AI-Chip Rally Lifts Its Shares
A year ago it sold mostly to the government. Now investors cannot get enough of Iluvatar CoreX, riding a share price that has more than tripled since January.
The Story Behind the Rally
With US export controls limiting access to Nvidia’s best chips, Chinese buyers are turning to homegrown alternatives. Iluvatar, a Shanghai chipmaker, is at the center of this trend.
It listed in Hong Kong six months ago, raising roughly $475m, and is now seeking an additional $850m from investors. This would bring their total funding from public markets close to $1.3bn.
The TianGai-100: A Competitor to Nvidia’s A100 and A800
Iluvatar’s TianGai-100 GPU line is pitched against Nvidia’s top models, despite the challenges of catching up in performance.
Revenue came in at about 1 billion yuan ($148m) last year, primarily from selling GPUs to the state. Winning a customer like ByteDance (TikTok and Douyin) would mark a significant breakout for Iluvatar.
ByteDance’s Diversification Efforts
ByteDance is exploring various options, including custom silicon from Qualcomm, signaling a potential shift away from Nvidia. This movement reflects a broader policy push by Beijing to promote domestic chip manufacturers.
The Pros and Cons of the Raise
The benefits of raising capital now include securing research, factory space, and inventory for large-scale orders. However, risks remain: dependence on a few buyers and a single product line could be detrimental if demand wanes or rivals surpass them.