Chinese AI chip founders become billionaires despite losses

September 11, 2026 at 11:51 AM2 min

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Shanghai Enflame Technology Co. founders Zhao Lidong and Zhang Yalin each reached a $2.5 billion fortune after the company's shares soared 234% on their Shanghai debut Friday. The chipmaker has never turned a profit since 2018 and relies on Tencent for 84% of its 990 million yuan 2025 revenue. The listing mirrors wealth surges at rivals Moore Threads and MetaX, which also went public while unprofitable.

Key Facts

Enflame's shares jumped as much as 234% on their first trading day in Shanghai, pushing each co-founder's fortune to $2.5 billion.
Tencent Holdings Ltd holds a 20% stake in Enflame and accounted for nearly 84% of the company's 990 million yuan ($138 million) revenue in 2025.
Enflame has fewer than 900 employees, one major customer, and has never turned a profit since its founding in 2018.
Founders of rival Chinese AI chip firms Moore Threads Technology Co. and MetaX Integrated Circuits Co. also became wealthy after their IPOs while their companies were unprofitable.

Founders' Wealth Surge

Zhao Lidong and Zhang Yalin, who co-founded Enflame in 2018, each saw their personal fortune reach $2.5 billion after the company's first-day share surge of up to 234%. Both founders are subject to lengthy lockup periods and must meet certain targets before they can sell their shares. Before starting Enflame, Zhao spent two decades in Silicon Valley and served as a vice president at state-backed Tsinghua Unigroup in Beijing, while Zhang rose through AMD's Shanghai research center to run its core chip development.

Tencent Dependence

Tencent Holdings Ltd is Enflame's biggest shareholder with a 20% stake and also its biggest client, generating nearly 84% of Enflame's 990 million yuan ($138 million) revenue in 2025. Tencent is ramping up AI capacity and requires massive computing power to support WeChat and other services, which directly benefits Enflame. Enflame's success is closely tied to Tencent, making it a smaller rival to Huawei Technologies Co. and Moore Threads in China's AI hardware market.

Market Context

Enflame's IPO was oversubscribed even as the company faces supply chain bottlenecks, competition from Nvidia Corp., and geopolitical uncertainties that have led to multiple quarters of losses. The founders chose to develop an alternative type of chip designed to operate outside Nvidia's ecosystem, avoiding direct competition with Nvidia's general-purpose graphics processing units. Chinese AI hardware companies like Enflame are benefiting from the country's rapid data center boom.