The Beijing-based minnow posted Rmb1 billion (€128 million) in the first half of the year, reversing last year's embarrassing Rmb533 million (€68 million) loss. Revenue exploded to Rmb2.9 billion (€372 million), a 44-fold increase compared to 2024 as domestic firms scrambled to dump foreign tech and swap in home-grown silicon.

Cambricon’s shares have been on a tear, doubling in the past month and nudging its valuation up to Rmb580 billion (€74.3 billion). The frenzy started after Chinese AI outfit DeepSeek rolled out a large language model that works fine without Nvidia’s kit.

Wednesday’s trading saw Cambricon’s shares climb another five per cent to Rmb1,391 (€178) with investors banking on Beijing's charm offensive to nurture its local AI chip ecosystem. ByteDance and Tencent have reportedly been told to wean themselves off Nvidia gear fast.

Chinese AI shops are ditching American silicon for local alternatives at least for inference tasks. That's the bit where trained models actually do the work like chatting nonsense in a chatbot.

Cambricon is hardly top dog. Huawei still rules the local AI chip roost and Cambricon controls just 3 per cent of the market, thanks largely to its modest manufacturing muscle, according to Bernstein's number crunchers.

Still, Cambricon is keen to shout about improvements to its inference software, claiming its customers can now run AI models more easily on its chips. The company wants to raise another Rmb4 billion (€513 million) through a stock offering to splash on better chips and training tools.

Bernstein semiconductor analyst Lin Qingyuan said Cambricon is the “best alternative to Huawei”.

“We continue to see Cambricon’s commercial momentum significantly improve, as the addressable market for China AI fabless continues to ramp up post-DeepSeek and the ban on Nvidia chips,” he wrote.