Chen Tianshi has multiplied his fortune more than twelvefold in two years to reach $22.5 billion. His company, Cambricon Technologies, has seen its shares soar 765% in 24 months and its revenue has grown more than 500% in the last year.
Why is it important. Cambricon’s meteoric rise is not so much a story of disruptive innovation as of strategic protectionism. And it well exemplifies how US technology sanctions have become the best trading partner for some Chinese companies.
The context. In 2019, Cambricon depended more than 95% on Huawei, which canceled all its contracts at once. The company seemed doomed. Then came the US restrictions of 2023 and 2024, which cut off the supply of NVIDIA chips to China.
The Chinese government responded by requiring companies to Buy “at home.” And that’s how Cambricon went from dying business to national champion.
Between the lines. The case shows the difference between competing in a free market and thriving in a protected one. Cambricon has not beaten NVIDIA in technology: its Siyuan 590 chip is several years behind the A100. But in a market sealed by government decree, it doesn’t need to be better, just available.
The company has accumulated inventory of 2.76 billion yuan ($380 million), something that would be worrying in any sector. But with NVIDIA chips locked, that stock It has become bargaining power. Some customers pay up to 30% extra for immediate delivery.
Yes, but. The question that divides analysts is how long it will last. “Cammbricon’s explosive growth is mainly due to a very low base, and its current valuation may be inflated without sustained political support,” explains Shen Meng, director at investment bank Chanson & Co.
Cambricon’s chip works well for inference (when an AI model makes predictions), but it lacks scalability for model training, the most computationally intensive phase. NVIDIA doesn’t just sell chips, it sells an entire ecosystem with CUDA that is “extraordinarily difficult to replicate quickly,” according to Sunny Cheung, a researcher at the Jamestown Foundation.
The contrast. Cambricon has a market capitalization of 558 billion yuan (about $68 billion), 60% less than that of Intel. But it generates just 1.6% of Intel’s revenue. Investors are not buying fundamentals, they are buying national hope.
The alarm signal. Cambricon herself has tried to cool the frenzy. In August, with its stock soaring more than 130% in a month, it issued an official warning: its trading Price had “deviated markedly” from its fundamentals and investors “could face substantial risks.”
When a company warns that its valuation no longer makes much sense, it is worth listening.
What does this say about technological warfare?. The Cambricon case shows that US technological sanctions are not holding back China, but rather reorganizing its industry. They are creating a new class of state-aligned tech elites, years after the Chinese government crushed its private giants.
The US government has cut off China’s access to advanced chips, but in exchange has given away captive markets to companies like Cambricon. The result is a Chinese semiconductor industry that is weaker technically but more dependent on the government. It’s not the free market that chooses the winners, it’s political favor.
The big question. What happens when protectionism is no longer enough? Cambricon achieved its first quarterly profit in the fourth quarter of 2024, four years after going public. It’s not bad either. But its growth depends on the government tap remaining open and Chinese companies having no alternative.
If US restrictions are eased or if domestic competitors like Huawei gain traction, the party could end quickly. Chen Tianshi has built a fortune of 22.5 billion on political arena. The history of technology suggests that these types of foundations do not usually last decades.
Featured image | Cambricon
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