Meet Cambricon: how 2 ‘genius brothers’ created China’s potential rival to Nvidia
The Chen brothers were students in an elite CAS ‘genius youth class’, a special programme designed to train top local talent
The hottest company in China right now is Cambricon Technologies, an artificial intelligence chipmaker whose stock has surged about 10-fold over the past two years, driven by expectations that it could be a serious challenger to Nvidia in the mainland market.
The frenzy over Cambricon, whose stock is trading at an eye-watering trailing 12-month price-to-earnings ratio above 4,000 – compared to under 60 for Nvidia – reflects a growing belief in China that the country is on a path to develop an AI ecosystem independent from US hardware.
Chinese model developer DeepSeek’s recent suggestion that the country’s “next-generation home-grown AI chips” were just around the corner has ignited enthusiasm about Cambricon’s prospects, analysts said.
“The rapid surge in Cambricon’s valuation reflects not just its recent growth but also heavy anticipation of future potential,” said Ray Wang, research director with a focus on the global semiconductor industry at Futurum Group. “This optimism is largely driven by regulatory and geopolitical shifts, strong domestic AI demand, and the latest DeepSeek optimisations for local hardware.”
The company’s core business is the development and design of AI chips for cloud servers, edge devices and terminals, as well as data-centre clusters. Cambricon is reportedly developing its flagship Siyuan 690, set to succeed the Siyuan 590 series launched in 2023. The new chip is expected to approach the capabilities of Nvidia’s H100.
Cambricon was founded in 2016 by two brothers, Chen Yunji and Chen Tianshi, who are now 42 and 40 years old, respectively. Born in Nanchang, the capital of Jiangxi province, they both went on to work at the Chinese Academy of Sciences (CAS), the country’s top science research agency.
The Chen brothers were students in the academy’s elite “genius youth class”, a special education programme designed to train top local talent, before they joined the academy’s Institute of Computing Technology. The elder brother focused on semiconductors while the younger turned to AI.
Both shared a passion for chip design. According to an interview with the elder Chen published by official media China Science Daily in September 2024, the brothers shared “laughter and tears” in jointly working on deep-learning processors, also known as AI accelerators.
One time, they argued about a research issue so fervently that they ended up in a physical fight, according to the older Chen. “As brothers, we can put aside all pretence and honestly face all kinds of problems,” he was quoted as saying by the newspaper. “Perhaps that’s the reason we can rapidly advance our cross-disciplinary research into chip design and AI algorithms.”
The pair began exploring the idea of “AI plus chip” around 2010, in which they studied the use of chips to accelerate deep learning algorithms.
In 2014, their co-authored paper on machine learning won the top award at ASPLOS, a leading computer architecture conference. With support from CAS, they taped out a prototype deep learning processor the following year, calling it Cambricon, after the Cambrian era of rapid evolutionary expansion.
The younger Chen is now Cambricon’s chairman and largest individual shareholder, directly owning a 28.6 per cent stake, making him one of the richest people in China with a personal net worth of US$20 billion. The company’s second-largest shareholder is a CAS-affiliated asset manager, with 15.7 per cent. The elder Chen returned to academia shortly after the company’s founding and is now the head of the CAS Laboratory of Processors, the top Chinese lab in the field.
Recent financial data shows that Cambricon’s business is starting to take off.
In the fourth quarter of 2024, the company recorded its first quarterly profit of 272 million yuan (US$38 million), reversing years of losses, while revenue rose 75.5 per cent year on year to 989 million yuan.
In the first quarter of this year, revenue surged 42 times compared with a year earlier, according to a filing to the Shanghai Stock Exchange, while income was 355 million yuan compared with a loss of 226 million yuan a year ago.
The China Academy of Information and Communications Technology, a think tank affiliated with the Ministry of Industry and Information Technology, listed the firm as one of eight hardware suppliers with DeepSeek-compatible products.
China’s AI momentum picked up last week, when DeepSeek said its latest V3.1 model was trained using a novel FP8 data format, which was “suitable for home-grown chips soon to be released”, without naming suppliers.
The comments came after reports that Nvidia paused production of China-specific H20 chips, which Beijing has flagged as a security concern, further fuelling local enthusiasm for Cambricon.
Like Nvidia, Cambricon designs chips and outsources the wafer manufacturing to foundries. Nvidia’s AI chips are exclusively made by the world’s No 1 foundry, Taiwan Semiconductor Manufacturing Company (TSMC).
Cambricon was added to Washington’s trade blacklist in December 2022, restricting it from acquiring US core technology, including using foundry services offered by TSMC.
There is no public information about what foundry Cambricon uses for its chips, but since it cannot access TSMC, it is likely that it relies on mainland foundries such as Semiconductor Manufacturing International Corporation or Hua Hong Semiconductor.
Cambricon’s market value is now US$70 billion, about 70 per cent of Intel’s US$107 billion. It took Intel 28 years to reach the market cap of what Cambricon did in nine years.
Goldman Sachs over the weekend reiterated its “buy” rating on Cambricon, lifting its 12-month price target by 50 per cent to 1,835 yuan from 1,223 yuan. The bank cited China’s cloud providers stepping up capital expenditure, customers diversifying away from US chips, and Cambricon’s pledge to invest 4.5 billion yuan in AI chips and software over the next three years.
Brokerages have followed with bullish calls. Guosen Securities expects revenues of 5.0 billion yuan for 2025, 7.3 billion yuan for 2026 and 10.2 billion yuan 2027. “The company’s rapid revenue growth reflects its success in expanding markets and enabling AI deployment,” Guosen wrote in a June research note, highlighting robust demand for domestic computing power.