How the market has changed

Reuters[1] Breakingviews puts China’s AI semiconductor market at approximately $90 billion and identifies Enflame, Moore Threads, MetaX and Biren as a group of companies gradually reducing the country’s dependence on NVIDIA. A separate Reuters report citing IDC shows that local suppliers held 41% of the server accelerator market in 2025, while NVIDIA retained 55%. [1 · Reuters Breakingviews] [2 · Reuters]

Enflame set its initial public offering price at 142.18 yuan per share and expects to raise about $908 million. The company remains unprofitable and is valued at approximately 61.8 times expected 2025 revenue at the offer price; the proceeds are intended primarily for new chip generations and joint hardware and software development. [3 · Reuters] [4 · Shanghai Stock Exchange]

Why restrictions strengthen local rivals

Restrictions on supplies of advanced American accelerators leave demand that Chinese cloud companies and state computing centers must direct toward local manufacturers. Stock market financing turns this protected demand into budgets for developing the next generation of products. [1 · Reuters Breakingviews] [2 · Reuters] [3 · Reuters]

For NVIDIA, this is an asymmetric risk: even if restrictions later ease, customers will already have invested in alternative hardware, software libraries and engineer training. A return of sales therefore does not necessarily mean an automatic recovery of its former market share. [1 · Reuters Breakingviews] [2 · Reuters]

Expert commentary

Market share by the number of accelerators shipped is not the same as a share of computing performance or profit. NVIDIA still benefits from CUDA, mature development tools and broad model compatibility; Chinese companies need to demonstrate not only chip production but also a reduction in the total cost of switching for developers. [1 · Reuters Breakingviews] [2 · Reuters] [4 · Shanghai Stock Exchange]

The next verifiable indicators are Enflame’s actual revenue after the offering, the share of orders outside Tencent, independent performance comparisons and the pace of workload migration from CUDA to local software environments. [1 · Reuters Breakingviews] [3 · Reuters] [4 · Shanghai Stock Exchange]

Sources

  1. Reuters Breakingviews — Chinese developers challenge NVIDIA’s advantage — September 7, 2026
  2. Reuters — AI accelerator suppliers’ market shares in China, according to IDC — April 1, 2026
  3. Reuters — terms of Enflame’s offering — August 31, 2026
  4. Shanghai Stock Exchange — Enflame prospectus — April 16, 2026