(Sept 15): Shanghai Biren Technology Co is weighing another share sale to help finance its artificial intelligence (AI) ambitions, according to people familiar with the situation.

The company, one of a group of graphics processing unit developers championed by Beijing, is considering raising about US$1 billion (RM4.05 billion), the people said. Banks are in the early stages of sounding out interest from potential investors, the people said, asking not to be identified because the information is private. 

Biren already raised about US$900 million in a July share sale. It agreed at the time not to sell any further stock for 90 days, a period that runs out in early October. Depending on market conditions, Biren could proceed with a fresh stock offering shortly after that lockup expires, the people said. 

Chinese AI firms are on a fundraising spree as they try to compete with the likes of Anthropic and OpenAI, even as concerns build about the development of advanced models and risks they might pose. On Sunday, Z.AI Co, or Zhipu, announced a US$5 billion stock and convertible bond sale to follow a US$4 billion deal in July. Zhipu’s shares have fallen 16% in Hong Kong this week.

Biren’s deliberations are ongoing and details such as the size and structure of a placement haven’t been finalized, the people said. The company may also decide not to do a deal. 

A representative for Biren didn’t respond to requests for comment. 

Biren erased an 8.2% gain in Hong Kong trading following the Bloomberg News report on the potential share sale. The stock was down 1% as of 3:08 p.m. local time. 

Shanghai-based Biren listed in Hong Kong at the start of this year, climbing more than 70% on its first day in a sizzling debut. After reaching a closing high of HK$68 in June, the stock has retreated to around half of that level, giving the company a market capitalisation of about HK$86 billion (RM44.42 billion). 

Hong Kong’s biggest-ever follow-on offering came last month, with Alibaba Group Holding Ltd raising HK$80 billion, which it intends to spend on advancements in AI as well. Its shares also fell the next day, by the most in more than a year. Concerns about dilution and oversupply are reflected in the stock market: the Hang Seng Tech Index is down 22% this year.   

Another Chinese tech company that issued shares in July, MiniMax Group Inc, is down 13% this week. 

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