China’s AI Chipmaker Biren Wins $280 Million In Funding Pledge After US Sanction

Dong Cao and Pei Li, Bloomberg News

(Bloomberg) -- Chinese artificial intelligence chip firm Shanghai Biren Intelligent Technology Co. has recently secured a pledge of 2 billion yuan ($280 million) from Guangzhou government-backed investors after the company was blacklisted by Washington in October, according to people familiar with the matter.

The startup has also talked to officials in Hong Kong in recent weeks for extra funding and it is considering establishing operations in the Chinese territory, according to the people, who asked not to be identified as the information is not public. The talks between Biren and the Hong Kong government may still fall through, the people said.

Biren and the related Hong Kong government agencies including the Financial Secretary’s Office did not immediately respond to requests for comment.

Biren’s success in raising new funds from investors affiliated with the local government in the southern Chinese city of Guangzhou comes as major Chinese tech firms include Baidu Inc. are seeking domestic alternatives to Nvidia Corp.’s AI chips, in the face of growing US curbs on China’s access to cutting-edge semiconductors.

Read more: Nvidia Slips After Growth Surge Fails to Meet Lofty Expectations

In addition to Biren, there are other domestic Nvidia challengers that Beijing and Chinese firms are betting on. Moore Threads Intelligent Technology Beijing Co., another Chinese AI chip startup that got sanctioned together with Biren by the US in October, reportedly also raised “hundreds of millions” in yuan from a series B-plus financing round.

In the current earnings season, the likes of Tencent Holdings Ltd. and Baidu were keen to reassure investors that they had stockpiled enough Nvidia chips to advance their AI capabilities. In the case of Baidu, it has been claiming that the latest iteration of its large language model can rival OpenAI’s advanced ChatGPT-4 in general capabilities.

Meanwhile, Biren is considering a listing in Hong Kong as soon as this year, Bloomberg News reported in July. If Biren eventually decides to set up shop in the Chinese territory, it could boost the Hong Kong government’s ambition to develop a local chip industry to aid Beijing’s objective of becoming self-sufficient in critical fields including advanced semiconductors.

--With assistance from Kiuyan Wong.