Chinese AI and Chip Firms Surge in Hong Kong IPOs as Tech Rivalry with US Intensifies in 2024

• Why Are Investors Bullish on China’s AI and Chip IPOs?
• How Does China’s Tech Valuation Stack Up Globally?
• What’s Driving Beijing’s IPO Acceleration Strategy?
• Key Takeaways for the Tech Cold War
• FAQs: Decoding China’s Tech IPO Boom

In a striking display of market confidence, three major Chinese tech companies—Zhipu AI, Shanghai Iluvatar CoreX, and Shenzhen Edge Medical—saw their shares skyrocket during their Hong Kong stock market debuts, collectively raising HK$9.3 billion (US$1.19 billion). Analysts view this as a strong endorsement of China's technological ambitions amid an escalating tech race with the US. The IPOs come as Beijing accelerates listings for domestic chip and AI firms to counter US dominance in advanced technologies. Here’s a DEEP dive into the breakout performances, strategic implications, and what this means for the global tech landscape.

Why Are Investors Bullish on China’s AI and Chip IPOs?

The first-day trading frenzy for these firms wasn’t just a fluke—it reflected pent-up demand for China’s homegrown tech alternatives. Zhipu AI, the country’s first large language model (LLM) company to go public, opened 3.3% above its IPO price of HK$116.20 and closed up 13.2% at HK$131.50. Not to be outdone, GPU developer Shanghai Iluvatar CoreX surged 31.6% early before settling at an 8.4% gain (HK$156.80), while surgical robot Maker Shenzhen Edge Medical rocketed 36.4% intraday, closing 30.9% higher at HK$56.60. "Early-stage losses don’t equate to weak prospects," noted Marco Sun, MUFG China’s chief markets analyst. "AI’s story in China is just beginning—judging now would be premature."

How Does China’s Tech Valuation Stack Up Globally?

Despite the hype, there’s a glaring gap. UBS China head Janice Hu pointed out that while US tech firms boast a combined $30 trillion valuation, China’s AI and high-tech sector trails at $5 trillion—with no single $1 trillion giant yet. "It’s only a matter of time before one emerges," she added, hinting at Beijing’s aggressive funding pipelines. For context, Zhipu AI’s post-IPO valuation hit HK$51 billion ($6.5 billion), with 40% of proceeds earmarked for R&D—a clear bet on catching up to OpenAI, which recently flagged Zhipu as China’s rising LLM contender.

What’s Driving Beijing’s IPO Acceleration Strategy?

The listings coincide with China’s push to fast-track approvals for semiconductor and AI firms, aiming to reduce reliance on US tech. Case in point: xFusion (server infrastructure) tapped Citic Securities for a mainland IPO, while DRAM leader ChangXin Memory and Baidu’s AI chip unit Kunlunxin are reportedly considering debuts. "These IPOs aren’t just fundraising—they’re geopolitical chess moves," observed Dan Ouyang of Baker McKenzie. Iluvatar’s HK$3.48 billion raise, for instance, will fuel chip/software R&D, critical for bypassing US export controls.

Key Takeaways for the Tech Cold War

1.The triple IPO success signals investor faith in China’s tech self-sufficiency drive.
2.China lacks mega-cap tech firms but is closing the R&D spending gap rapidly.
3.Expect more chip/AI listings as Beijing prioritizes "chokepoint" technologies.
Data sources: TradingView, Hong Kong Stock Exchange filings.