Chen Tianshi, cofounder of Chinese chip company Cambricon Technologies, saw his net worth soar to $10 billion after the company’s Shanghai-listed shares skyrocketed 500% in 2024 amid China’s push for technology self-reliance. Yet analysts question whether his company’s shares will remain so high.
Cambricon Technologies, where the 40-year-old is both chairman and CEO, was the second most valuable company by market capitalization on China’s Nasdaq-like ChiNext board as of Jan. 15, according to the latest data available on the Shanghai Stock Exchange, when it reached 291 billion yuan ($40 billion). But after surging 7.3% in the first two weeks of 2025, its shares fell as much as 17% Thursday morning before paring some of the losses to end 11.5% lower as of noon.
The slide came as Nvidia’s billionaire cofounder Jensen Huang reportedly arrived in China’s tech hub Shenzhen for a visit. Shen Meng, a Beijing-based managing director at boutique investment bank Chanson & Co., says by WeChat that his friendly reception is perceived as helping Nvidia’s China business at the expense of local rivals including Cambricon Technologies.
Huang, now the world’s 10th richest man with a net worth of $119 billion, is pushing back against the latest control measures on chip exports imposed by the U.S. Nvidia has said the restrictions, which allows sales to a group of selected U.S. allies but makes it harder for countries including China and Russia to buy AI-related chips, threatens to undermine American leadership and hurt economic growth worldwide. In the 2024 fiscal year, the American tech giant generated 16.9% of its $61 billion in sales from mainland China and Hong Kong, according to its annual report. Its graphic processing units (GPUs), a type of AI-related chips, are being stockpiled by Chinese web giants including Alibaba and ByteDance for AI development, He Sui, a Shanghai-based research director at research firm Omdia, says by phone.
Some investors believe Cambricon Technologies could one day become the Nvidia of China. Market shares held by domestic companies in China’s AI chip market will continue to rise as Beijing encourages the use of local technologies amid rising tensions with the U.S., according to He.
Cambricon Technologies is one of the few local companies the public can invest in. Chinese tech giant Huawei, which is also developing chips, is privately held. Both companies are on the U.S. government’s so-called entity list, which restricts them from acquiring American technology due to national security concerns.
Cambricon Technologies, which has not reported an annual profit since its initial public offering in 2020 partly due to high research spending, still sports a price-to-sales ratio of over 340 times after today’s plunge. Nvidia, whose Nasdaq-listed shares rallied 150% last year, has a price-to-sales ratio of 30 times.
“Obviously, it is a big bubble,” Dickie Wong, Hong Kong-based executive director of research at Kingston Securities, says by text messages. “Investors are too optimistic about its AI businesses. Its valuation seems speculative and risky.”
Cambricon Technologies didn’t respond to repeated requests for comment.
Chen, a child prodigy who was admitted to the Hefei, Anhui-based University of Science and Technology of China at the age of 16 as part of a special program for talented kids, took a research job at the state-affiliated Chinese Academy of Sciences in 2010 after receiving a Ph.D. in computer science from the same university, according to local media reports.
He worked at the research institute for almost a decade, and launched Cambricon Technologies in 2016 while still there. He left in 2019 to focus on Cambricon Technologies. The research institute, an early investor in the company, holds 16% of its shares, according to the Shanghai Stock Exchange.
The company is lagging “a lot” in technology prowess behind Nvidia, which was founded in 1993, Sun Wei, a Beijing-based senior analyst at research firm Counterpoint Research, says by phone.
But she says its products might be more adaptable, meaning they can be tailored for specific uses in China. In its 2023 annual report, Cambricon Technologies said Chinese AI startups Baichuan AI and HiDream.ai used its customized semiconductors to develop AI models. It also optimized its chips for uses in computer vision and language processing for undisclosed local internet companies, according to the annual report.
Cambricon Technologies expects 2024 sales to grow up to 69.2% year-on-year to 1.2 billion yuan, according to preliminary results reported to the Shanghai Stock Exchange. The company says losses will shrink up to 53.3% to 396 million yuan from a year ago.
But whether it can stand out among domestic competitors is another question. Paul Triolo, a Washington, D.C.-based partner at advisory firm DGA-Albright Stonebridge Group, says it is actually Huawei, not Cambricon Technologies, that has the best chance of catching up with Nvidia.
“Huawei’s Ascend 910X series of GPUs is getting more capable and could soon match the performance of Nvidia A100 GPUs,” he says by email. “It is possible that some of the top Chinese GPU design firms team up with or are absorbed by Huawei, pushing towards better GPU designs.”