‘China’s Nvidia’ collapsing in a heated funding dispute

A fabless chip maker vaunted as “China’s Nvidia” has announced it will dismiss more than 400 employees after being hit with a shareholders’s suit in a fundraising dispute.

Xiangdixian Computing Technology, a Chongqing-based chip designer established in September 2020, told its staff members in an internal meeting on August 30 that it had to terminate their employment contracts due to a lack of cash.

The unicorn company, valued at 15 billion yuan (US$2.1 billion), laid off dozens of its newly employed fresh graduates in April and started capping all employees’ monthly salaries at 20,000 yuan in May. It has reportedly failed to pay its employees over the past two months.

On September 1 evening, Xiangdixian issued a statement stating that it has not yet gone bankrupt, as it is only “optimizing” its structure to boost efficiency.

The statement said it has been focusing on making graphic processing units (GPUs) since its establishment but China’s GPU market development has not yet met the company’s expectations. The company said it is looking for new investors.

Some commentators said Xiangdixian had to downsize its businesses because its products couldn’t compete with rivals such as Huawei Technologies’ Ascend 910 series and Hygon Information’s Deep Computing Units (DCUs).

They speculated the Chinese government may not want too many GPU types on local markets as this could impede the building of an ecosystem.

“Hygon’s DCUs are now using translation layers for Nvidia’s CUDA software. But it’s possible that Nvidia would ban the use of other chips with its software one day,” a Beijing-based columnist said in an article published in April.

“Although Nvidia has only warned its users about the possible ban and not yet taken