TLDR:
- Chinese venture capital firm HongShan has invested in Iluvatar CoreX, a startup that competes with Nvidia in the Chinese market.
- HongShan has been making investments in domestic AI chip startups as the US tries to block China’s access to Nvidia’s advanced chips.
HongShan, a Chinese venture capital firm that recently separated from Sequoia Capital, has made an investment in a start-up that competes with American artificial intelligence chip giant Nvidia in the Chinese market. The investment was made in Shanghai-based Iluvatar CoreX, which was previously valued at more than $1 billion. This comes as the US has been attempting to block China’s access to Nvidia’s most advanced chips through export restrictions, which has added urgency to China’s efforts to develop its own homegrown alternatives.
HongShan, led by Neil Shen, is the largest and most successful VC firm in China. Its investments are closely watched by other investors and founders, as well as foreign government agencies involved in trade and technology battles with China.
This new investment by HongShan is part of a larger trend of Chinese venture capital firms investing in domestic AI chip start-ups. These investments are seen as a way for China to develop its own alternative to Nvidia’s chips and reduce its reliance on foreign technology. The US has targeted Nvidia specifically because its chips are used in high-performance computing and artificial intelligence applications, which are seen as crucial for economic and national security.
The US government has placed export restrictions on Nvidia’s most advanced chips, citing concerns about intellectual property theft and national security. These restrictions have made it difficult for Chinese companies to acquire the latest technology from Nvidia, prompting them to invest in domestic alternatives.
China has been making significant investments in the development of its domestic semiconductor industry, including AI chips. The country has set a goal of becoming self-sufficient in semiconductor production by 2025 and has allocated billions of dollars in funding to support the industry’s growth. Investment from Chinese venture capital firms like HongShan is seen as crucial for the success of these domestic chip start-ups.
Overall, this investment by HongShan in Iluvatar CoreX highlights the growing competition between China and the US in the semiconductor industry, particularly in the AI chip sector. The US government’s export restrictions on Nvidia’s chips have created an opportunity for Chinese companies to develop their own alternatives and reduce their reliance on foreign technology.
