Tencent bought 84 percent of Enflame's 2025 revenue before Friday's Shanghai debut
The AI chipmaker's shares closed 179 percent above the offer price on Shanghai's Star Market, and the revenue behind that valuation came almost entirely from Tencent, which owns 20 percent of the company and buys most of its chips.
The Product Desk
What happened
- Shanghai Enflame Technology closed its first day on Shanghai's Star Market 179% above its offer price on Friday, after opening at 410 yuan against an IPO price of 142.18 yuan.
- Retail investors bid for 4,073 times the stock set aside for them, with about 7 million online investors ordering 42.1bn shares and getting an allocation rate of 0.025%.
- The company sold 43 million shares to raise about 6.12bn yuan, having won approval for the listing in June, Bloomberg reported.
- Enflame has never turned a profit; its net loss narrowed to 1.16bn yuan in 2025 from 1.5bn yuan a year earlier, and it expects to break even in 2026 or 2027, Business Insider reported.
Why it matters
- Who's exposed exposure Anyone buying the stock on the strength of Chinese AI demand is underwriting a single account. Strip Tencent out and Enflame's revenue from all other customers fell by roughly two thirds in the year the headline number grew.
- What it limits constraint The fifth- and sixth-generation roadmap the IPO funds will be specified in practice by the buyer that also owns a fifth of the company. That limits how far the parts can be tuned for anyone else.
- What it limits constraint Domestic capital paid for the design work, and the fabrication decision stays with foreign foundries.
- What doesn't add up contradiction One session produced three gain figures, so coverage citing CNBC's 206% or Business Insider's roughly 200% is describing a different moment of the day than the 179% close, and the valuation follows the number you pick.
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Enflame's customer list, as its income statement describes it, is close to one name. Sales to Tencent were 84% of 2025 revenue, up from about 38% a year earlier, Bloomberg reported [13]. Revenue was 990m yuan in 2025 against 722m yuan in 2024, according to CNBC [14], so the top line grew about 37% [31]. Apply the percentages. About 832m yuan of last year's revenue came from Tencent, leaving roughly 158m yuan from everyone else [27][28]. In 2024 the same split was about 274m yuan from Tencent and about 448m yuan from all other customers [29]. The book outside Tencent shrank by roughly two thirds while the headline number rose [30].
"The appeal of the company lies in its position as one of China's leading cloud AI chipmakers, as well as Tencent's dual role as both a key customer and major shareholder," analysts at Huajin Securities including Li Hui wrote in a note reported by Bloomberg [23]. The same analysts said Enflame trails its peers in revenue scale and gross margin [24].
Paul Triolo of the advisory firm DGA called Enflame's choice of alternative chips a "high-risk form of strategic independence" and told Bloomberg the approach "may be good for Tencent and municipal data centers" while being "less attractive in the open developer market" [25]. Outside Tencent, Enflame's revenue has come from Chinese state-backed computing projects in cities including Wuxi and Qingyang [20]. Enflame did not respond to Bloomberg's requests for comment [26].
At Friday's close the company was priced at about 173 times its 2025 revenue [32], and its 2025 net loss was about 1.17 times that revenue [33]. Management has told the market the gap narrows fast: a loss of no more than 860m yuan for the first nine months of 2026, on revenue expected to more than triple from a year earlier [34].
The listing capitalises design work. Enflame plans to spend the proceeds on fifth- and sixth-generation chips it wants to match high-end products from international rivals, CNBC reported [17]. Those advanced parts are still made by overseas manufacturers, according to The Information [18], and in late 2023 the company downgraded some designs to keep access to TSMC's factories [19].
Whether a domestic accelerator is a business or a captive supplier turns on the share of revenue that comes from the shareholder, and on what a customer pays to move a workload onto the part and keep it there. Enflame answers the first at 84% [13]. On the second there is no published figure: the founders deliberately built a chip designed to work outside Nvidia's ecosystem [12], and neither the porting cost nor a count of customers who stayed past one contract appears in what has been disclosed.
What to watch
- Whether the first nine months of 2026 land inside the 860m yuan loss cap, and how much of the promised revenue tripling comes from Tencent.
- Whether Enflame discloses a second customer of any real size, or whether state-backed computing projects in cities such as Wuxi and Qingyang remain the entire non-Tencent book.
- Whether the fifth- and sixth-generation designs get fabricated abroad as drawn, or get downgraded again to keep foundry access.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence64
- Adoption30
- Hype gap+40
- Incentives70
- Confidence60
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
Shares in Shanghai Enflame Technology closed 179% above their offer price on their first day of trading on Shanghai's Star Market on Friday.
- [2]
Enflame raised about 6.12bn yuan ($911m) in its initial public offering, Bloomberg reported.
- [3]
The stock opened at 410 yuan against an IPO price of 142.18 yuan, rose as much as 234% to 475 yuan during the day, and closed at 397 yuan, Ann Cao reported for the South China Morning Post.
- [4]
The close gave Enflame a market value of 170.9bn yuan ($25.5bn), according to the South China Morning Post.
- [5]
Reports published during the session gave other figures: CNBC put the gain at 206%, and Business Insider at about 200%.
- [6]
Retail investors bid for 4,073 times the shares available to them; about 7 million online investors ordered 42.1bn shares, and individual investors got an allocation rate of 0.025%, one of the lowest in mainland China this year, per Enflame's exchange filing cited by the SCMP.
- [7]
The robot maker Unitree had a retail allocation rate of 0.018%, the SCMP reported.
- [8]
CNBC reported that the retail offering drew orders for more than 6,000 times the shares available, before Enflame reallocated more stock to that group.
- [9]
Enflame sold 43 million shares in the IPO, according to Bloomberg, and won approval for the listing in June.
- [10]
Enflame was founded in Shanghai in 2018, makes AI chips for training and inference, has fewer than 900 employees and has never turned a profit, Diana Li reported for Bloomberg.
- [11]
Co-founders Zhao Lidong and Zhang Yalin both worked at AMD; Zhao spent two decades in Silicon Valley and was a vice president at the state-backed Tsinghua Unigroup, and Zhang ran core chip development at AMD's Shanghai research centre.
- [12]
From the start the founders chose not to compete directly with Nvidia's general-purpose graphics processors, building a different type of chip designed to work outside Nvidia's ecosystem, Bloomberg reported.
- [13]
Tencent holds a 20% stake in Enflame and is also its largest customer; sales to Tencent made up 84% of Enflame's revenue in 2025, up from about 38% a year earlier, according to Bloomberg.
- [14]
Revenue rose to 990m yuan in 2025 from 722m yuan in 2024, CNBC reported.
- [15]
Enflame posted a net loss of 1.16bn yuan for 2025, narrower than the 1.5bn yuan loss the year before, according to Bloomberg.
- [16]
Enflame expects to break even in 2026 or 2027, Business Insider reported.
- [17]
Enflame plans to spend the IPO proceeds on developing its fifth- and sixth-generation AI chips and wants them to match the performance of high-end products from international rivals, according to CNBC.
- [18]
Enflame still relies on overseas manufacturers to produce its advanced chips, Qianer Liu reported for The Information.
- [19]
In late 2023, geopolitical tensions forced Enflame to downgrade some chip designs to keep access to TSMC's factories, according to Bloomberg.
- [20]
To bring in revenue, Enflame has relied on Chinese state-backed computing projects in cities such as Wuxi and Qingyang.
- [21]
The Star 50 Index dropped 1% on Friday and the benchmark CSI 300 Index 0.8%, the SCMP reported.
- [22]
The share rise brought each founder's fortune to $2.5bn, according to Bloomberg, and both are bound by long lockup periods and must meet certain targets before they can sell.
- [23]
"The appeal of the company lies in its position as one of China's leading cloud AI chipmakers, as well as Tencent's dual role as both a key customer and major shareholder," analysts at Huajin Securities, including Li Hui, wrote in a note reported by Bloomberg.
- [24]
The Huajin Securities analysts added that Enflame trails its peers in revenue scale and gross margin.
- [25]
Paul Triolo, a partner and head of technology at the advisory firm DGA, called Enflame's choice of alternative chips a "high-risk form of strategic independence" and told Bloomberg the approach "may be good for Tencent and municipal data centers" and could be "less attractive in the open developer market".
- [26]
Enflame did not respond to Bloomberg's requests for comment.
- [27]
Tencent accounted for about 832m yuan of Enflame's 2025 revenue.
- [28]
Customers other than Tencent accounted for about 158m yuan of Enflame's 2025 revenue.
- [29]
In 2024, Tencent accounted for about 274m yuan of Enflame's revenue and other customers for about 448m yuan.
- [30]
Enflame's revenue from customers other than Tencent fell by about 65% between 2024 and 2025.
- [31]
Enflame's total revenue grew about 37% in 2025.
- [32]
Enflame's first-day closing market value was about 173 times its 2025 revenue.
- [33]
Enflame's 2025 net loss was about 1.17 times its 2025 revenue.
- [34]
The company forecast a loss of no more than 860m yuan for the first nine months of 2026, and Bloomberg reported that revenue for the period is expected to more than triple from a year earlier.
Sources
2 independent publishers whose own reporting we read for this story.
- siliconangle.comChinese AI chip developer Enflame raises $912M in IPO
2 articles · September 11, 2026
- thenextweb.comTencent-backed chipmaker Enflame nearly triples in its Shanghai debut
1 article · September 11, 2026