China’s $40 Billion Chip Bet Explodes 425%–Is This the Next Nvidia or Just Hype?

China just watched one of its most ambitious chip stories break into the public markets with fireworks. Moore Threads raised 8 billion yuan in mainland China’s second-largest IPO of the year, then rocketed 425% on day one before easing roughly 1% on Monday in Shanghai. This debut turned a three-year-old startup into a $40 billion market force and placed founder Zhang Jianzhong Nvidia’s NVDA former China chief into billionaire territory with a stake valued above $4.3 billion, according to the Bloomberg Billionaires Index. The deal also minted several co-founder billionaires, reinforcing the idea that China’s domestic chip market could be entering a new phase of self-funding momentum as export controls have limited Nvidia’s ability to serve local demand.

That enthusiasm sits inside a wider frenzy for homegrown semiconductor champions. The Star 50 Index is up 37% this year, while Cambricon has doubled in value, suggesting domestic investors are racing to support companies tied to tech self-sufficiency. But analysts warn much of this rally could be driven more by domestic cheerleading and geopolitical symbolism than tested commercial traction. Moore Threads’ revenue in the first three quarters of 2025 reached 785 million yuan, up 181% year-over-year, yet the firm has accumulated nearly 6 billion yuan in losses from 2022 through late 2025 as it burns capital to stay competitive. Shen Meng at Chanson & Co. argued that valuations within the A-share market could be detaching from economic logic amid the US-China tech rivalry, with many of these new firms serving as political symbols more than proven market disruptors.

Zhang is betting that full-function GPUs could be the domestic substitution story investors want, with Moore Threads tarreceiveing chips capable of AI training, physical simulation and 3D graphics rconcludeering all at once the same versatility that powered Nvidia’s global leadership. IPO proceeds are earmarked for next-generation chip development, and policy support could be pivotal as the government pushes more sectors, including the military, to acquire fully local. Moore Threads’ prospectus reveals the company expects to turn profitable by 2027, though catching up with Nvidia could be extremely challenging given the US firm’s decades of continuous iteration. Still, Moore Threads’ blockbuster listing may be the latest signal that China’s capital markets are willing to aggressively finance national champions, even if the commercial payoff remains in its earliest innings.

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