Chinese AI Chip Startup Secures CNY 20B from Investors and Authorities

Enflame, a Chinese artificial intelligence (AI) chip startup backed by tech giant Tencent, announced on Sept 28 that it had raised 20 billion yuan ($2.74 billion) from investors including funds linked to a Shanghai government authority.

The agreement comes as the advancement of generative AI, aided by the success of OpenAI's ChatGPT, increases investor interest in companies developing AI-related infrastructure such as AI chips.

Enflame stated that the latest fundraising was co-led by investors, including a few funds backed by Shanghai International Group, which is controlled by the state asset regulating authority in the Shanghai municipality.

Tencent, which has cooperated with Enflame in developing an AI chip named Zixiao and contributed to the startup's earlier fundraising, also participated in the latest investment round, according to a statement by Enflame.

Tencent Holdings Ltd. is a Shenzhen-based Chinese multinational technology and entertainment conglomerate and holding company. It is one of the world's highest-earning multimedia companies in terms of revenue. Tencent Games, a division of Tencent Interactive Entertainment Group (IEG) focused on game publishing, is also the world's largest company in the video game industry in terms of investments.

Social networks, music, web portals, e-commerce, mobile games, internet services, payment systems, smartphones, and multiplayer online games are among its services. It runs the instant messengers Tencent QQ and WeChat, as well as QQ.com. Tencent Music is also under its control.