*

Raised 1.5 billion yuan mainly from state-linked

investors, say

sources

*

Is preparing to file for a Hong Kong IPO as early as

August,

says source

*

Was valued at about 14 billion yuan before latest funding

round,

say sources

BEIJING, June 26 (Reuters) - Chinese AI chip startup

Biren Technology has raised about 1.5 billion yuan ($207

million) in fresh funding and is preparing for a Hong Kong

initial public offering, people familiar with the matter said.

The funding round and IPO plan come as China seeks to

develop domestic alternatives to U.S. semiconductors amid

escalating export restrictions by Washington on advanced chips.

Beijing has prioritised building homegrown champions in

graphics processing units (GPUs), which are critical for

artificial intelligence development.

The 1.5 billion yuan funding round was led primarily by

state-linked investors, two of the sources said. Participants

included a state-backed fund from Guangdong province and another

from the Shanghai government, according to one source.

Biren initially filed documents for a mainland China listing

last year but has since shifted focus to Hong Kong, partly due

to stricter regulatory requirements on the mainland including

less tolerance for loss-making companies, two of the sources

said.

The company is preparing to file for a Hong Kong listing in

the third quarter, potentially as early as August, one source

said. It was not immediately clear if Biren had appointed

advisers for the IPO.

Biren was valued at approximately 14 billion yuan prior to

the latest funding round, two of the sources said.

Biren, and the Guangdong provincial and Shanghai

governments, did not immediately respond to requests for

comment.

The sources, who spoke to Reuters, declined to be named as

the information is not public.

Developing domestic GPU capabilities has become critical for

China as the U.S. has tightened export restrictions on advanced

semiconductors. The latest measures, implemented in April,

prompted U.S. chip giant Nvidia ( NVDA ) to halt sales of its

H20 AI chips to Chinese customers.

The potential market for Chinese AI chip companies is

substantial. Investment bank Morgan Stanley predicted in a May

client note that domestic GPU makers could generate 287 billion

yuan in sales by 2027, capturing 70% of the Chinese market

compared with 30% last year.

FACED UPHEAVAL

Founded in 2019, Biren's co-founders include Zhang Wen,

formerly a president at leading AI face-recognition company

SenseTime ( SNTMF ), and Jiao Guofang, who previously worked at

Qualcomm ( QCOM ) and Huawei.

The company initially drew attention from investors and

industry observers in 2022 when it unveiled its first batch of

products, including the BR100 chip, which it claimed could match

the performance of Nvidia's ( NVDA ) advanced H100 AI processor.

However, the company was added to the U.S. 'Entity List' in

2023, preventing it from using leading global foundries such as

Taiwan Semiconductor Manufacturing ( TSM ) to manufacture its

chips.

Biren has since experienced significant upheaval, with some

senior executives departing, including co-founder Xu Lingjie.

It continues to operate at a loss and generates limited

revenue, recording 400 million yuan in sales in 2024, according

to two of the sources.

The company's general-purpose GPU products have been

deployed across multiple intelligent computing centers, and its

partners include China Mobile, China Telecom

, ZTE (Shenzhen:000063), and the Shanghai AI Laboratory,

according to its official website.

Some of these companies have also been targeted by U.S.

restrictions, including China Mobile and China Telecom, which

the Federal Communications Commission said in March it is

investigating for potential evasion of U.S. sanctions.

Biren also faces intense competition from other Chinese AI

chip companies, including Huawei and peers such as

Tencent ( TCTZF )-backed Enflame and Metax.

(Reporting by Beijing and Shanghai newsroom; Editing by

Muralikumar Anantharaman)