Advanced Computing in the Age of AI | Sunday, December 3, 2023

Chinese AI Chip Startup Enflame Brings in $278.5M in New Funding 

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Enflame Technology, a Chinese AI startup developing deep learning chips for AI training, has secured another $278.5 million in funding from government and industry investors.

The latest investor group includes Chinese Internet giant Tencent, which also participated in earlier Enflame funding rounds. Others joining the funding round included CITIC Group, the former state-owned investment company, investment bank China International Capital Corp. and the Chinese investment firm Primavera Capital Group.

Shanghai-based Enflame is among a growing list of up-and-coming AI chip developers heavily back by the Chinese government as Beijing seeks to nurture indigenous semiconductor capabilities. Enflame and other Chinese startups, including Cambricon Technologies Corp., Intellifusion and Illuvater CoreX are developing AI SoCs aimed at training, HPC and other enterprise applications.

Enflame’s AI development focuses on deep learning approaches used in cloud data centers, and are aimed at cloud AI training applications. "This is one of the few Chinese startups to go after training, which will require a huge effort [and] abandoned investment in software to develop and optimize neural networks," said industry analyst Karl Freund of Moor Insights & Strategies.

Chinese investment funds are expected to pour an estimated $30 billion into AI and related research as Beijing seeks to lead the world in AI technologies by 2030. Overall, China will, according to media reports and technology assessments, invest an additional $1.4 trillion in government and private funds in AI and other next-generation technologies.

Tencent (OTCMKTS: TCEHY) is among several Chinese technology giants making large bets on AI chip development. Last year, China AI leader Baidu (NASDAQ: BIDU) announced plans to train five million AI developers by 2025 while deploying an equal number of AI cloud servers across its 10 data centers by 2030.

Chinese investors are also pouring millions into other AI chip startups. According to the website, Cambricon Technologies raised an estimated $200 million from Chinese venture funds. The Beijing-based chip developer raised an estimated $369 million in a July 2020 initial stock offering.

Cambricon’s first-generation AI chip is a deep learning processor targeted at edge and consumer devices.

As the U.S. seeks to jumpstart AI R&D efforts and leverage what observers consider western “asymmetric advantages” in talent and technical capabilities, industry analysts nevertheless say those public-private efforts pale in comparison to China’s AI chip push.

“We see China’s AI goals as well as the goals in other ‘Made in China’ technologies are becoming more aspirational and aggressive,” said Jerrold Wang, an analyst with Lux Research.

“The Chinese technologies in those fields are improving fast and China has become [a] top tier player in most of those fields, so the government’s targets are not just to catch up with the leading countries in the world, but to lead the world.”

--Editor's note: This story has been updated.

About the author: George Leopold

George Leopold has written about science and technology for more than 30 years, focusing on electronics and aerospace technology. He previously served as executive editor of Electronic Engineering Times. Leopold is the author of "Calculated Risk: The Supersonic Life and Times of Gus Grissom" (Purdue University Press, 2016).