Two Chinese artificial intelligence chip startups, Moore Threads and MetaX, are planning to raise a combined 12 billion yuan ($1.65 billion) through initial public offerings (IPOs).

What Happened: The two companies are betting on the U.S. export restrictions to boost the demand for their products in China, Reuters reported.

Moore Threads, based in Beijing, aims to raise 8 billion yuan, while MetaX, based in Shanghai, is looking to raise 3.9 billion yuan. Both companies are planning to list on the STAR Market, the tech-focused board of the Shanghai Stock Exchange

These fundraising plans highlight the increasing efforts of Chinese chipmakers to capitalize on Beijing’s drive to develop domestic champions in graphics processing units (GPUs), which are crucial for AI development.

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The U.S. has been tightening export restrictions on China, with the latest rules implemented in April banning the shipment of Nvidia’s H20 chips, one of its most popular chips, to China. These restrictions have led to a sense of urgency in Beijing to develop domestic chip champions.

Both Moore Threads and MetaX have cited U.S. sanctions as a major risk to their development, but have also emphasized that the restrictions could create significant market opportunities. The two companies design GPUs to compete with Nvidia ( NVDA ) products and have reported significant losses over the last three years, largely attributed to heavy research and development spending.

Why It Matters: The move by Moore Threads and MetaX to go public amid U.S. export sanctions is part of a larger trend of Chinese companies seeking to reduce their reliance on foreign chipmakers. In May, Alibaba ( BABA ) , Baidu ( BIDU ) , and Tencent ( TCTZF ) began switching to homegrown chips as U.S. export controls and a dwindling stockpile of Nvidia ( NVDA ) processors eroded their ambitions.

The move also aligns with China’s broader push for self-sufficiency in chips, with major Chinese automakers aiming for 100% domestic chip supply by 2027. This push is being shepherded by China’s Ministry of Industry and Information Technology, which regularly requires self-assessments of domestic chip adoption rates.

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