Chinese AI chip founders are worth $2.1 billion each at a company that has never made a profit

Zhao Lidong and Zhang Yalin, the two former AMD engineers who founded the Chinese artificial intelligence chipmaker Shanghai Enflame Technology in 2018, are each worth about $2.1 billion following the company's stock market debut on Friday, Sept. 11, according to Forbes. Bloomberg puts the figure higher, at roughly $2.5 billion each.

Enflame has never made a profit. Its cumulative losses stood at 4.29 billion yuan when it filed to list.

The company raised 6.12 billion yuan, about $912 million, selling 43.04 million new shares at 142.18 yuan each on the STAR Market, the Shanghai exchange's technology board. The stock opened at 410 yuan, nearly three times the offer price, and touched 475 yuan during the session before closing 179 percent up. That valued Enflame at about 171 billion yuan, roughly $25.5 billion, against 61.2 billion yuan, or about $9.1 billion, at the offer price. Conversions are at 6.71 yuan to the dollar.

Zhao, 60, is chairman. Zhang, 48, is chief executive. Between them they spent more than three decades inside AMD's processor and graphics divisions before leaving to build a Chinese alternative to Nvidia.

One shareholder, one customer, the same company

Enflame employed about 860 people as of September 2025 and makes accelerator chips, add-on cards, computing systems and software for training and running artificial intelligence models in data centres.

Tencent Holdings is its largest outside shareholder, with 17.95 percent after the offering. Tencent is also its largest customer. Sales linked to the technology group accounted for 83.79 percent of Enflame's 2025 revenue, up from 38 percent in 2024 and 33 percent in 2023.

That structure means the company supplying most of Enflame's revenue also holds a substantial claim on its equity. It flatters the demand figures, because sales to a shareholder are not the same evidence of market appetite as sales to an arm's length buyer. It also concentrates the risk in one counterparty. Should Tencent build its own silicon, buy elsewhere or simply slow its orders, Enflame loses its principal customer, and its principal backer is positioned to see it coming before anyone else does.

The dependency has deepened rather than eased as the company has grown, which is the opposite of what an investor would want to see before a listing.

Zhao and Zhang hold 28 percent as persons acting in concert, according to the prospectus published on June 7. State-backed institutions are also on the register, including the National Integrated Circuit Industry Investment Fund Phase II with 4.3 percent, Shanghai Guofang Private Equity Fund Management with 3.7 percent and China International Capital Corporation with 2.5 percent.

The last of the four dragons

Enflame is the last of the four Chinese AI chip designers known domestically as the four little GPU dragons to reach the public market, following Moore Threads, MetaX Integrated Circuits and Biren Technology.

All four have benefited from the same conditions. United States export controls have made Nvidia's most capable chips difficult to obtain in China, Beijing has made semiconductor self-sufficiency an explicit policy goal, and domestic investors have responded with money. Chinese chipmakers shipped 1.65 million AI graphics processors in 2025, taking 41 percent of the domestic market, according to IDC figures reported by Reuters in April.

The listings have produced fortunes on a scale unrelated to the underlying earnings. Bloomberg values Cambricon founder Chen Tianshi at $22.5 billion. MetaX founder Chen Weiliang's stake reached roughly $6.5 billion after his company rose about 700 percent on debut. Retail demand for the Enflame offering was reported as strong.

Enflame has a product record behind it, which distinguishes it from a pure concept listing. Its S60 accelerator had shipped roughly 70,000 units by the middle of 2025. Proceeds from the offering are earmarked for fifth and sixth generation chips and the software that runs on them, rather than for diversifying the customer base.

A policy bet rather than an earnings stream

What investors bought on Friday is an option on Chinese domestic AI demand and on the export controls staying in place long enough for companies like Enflame to close the performance gap with Nvidia.

Eight years after founding, the company has accumulated losses, fewer than 900 staff, one customer providing more than four fifths of revenue, and a valuation of $25.5 billion. None of those facts changed during Friday's session. The share price did.

Paper wealth created this way reverses as quickly as it appears, and the founders cannot sell into it. Lock-up rules on the STAR Market restrict controlling shareholders from disposing of stock for an extended period after listing, which means Zhao and Zhang hold billion-dollar valuations they cannot convert to cash while the price is at its peak.

Neither founder has commented publicly on the valuation.