Iluvatar CoreX raises HK$7.07 billion in share placement at 15% discount

Iluvatar CoreX is raising HK$7.07 billion through a share placement at a 15% discount to fund R&D and supply chain expansion.

Iluvatar CoreX, a Chinese GPU designer, is raising HK$7.07 billion ($902 million) in a Hong Kong share placement at a 15 percent discount, joining a wave of AI companies tapping the city's capital markets.

"The proceeds will be used to advance research and development, accelerate product iteration, and strengthen supply chain resilience for key materials and components," the company said in an exchange filing Thursday. Net proceeds are expected to reach HK$7.03 billion.

Iluvatar CoreX is offering 14.86 million new H-shares at HK$476 apiece, representing about 5.5 percent of the enlarged share capital. The placement comes a day after Zhipu AI, known as Knowledge Atlas Technology, priced its HK$31.41 billion Hong Kong offering at the bottom of its range.

The fundraising shows strong investor appetite for Chinese technology companies as AI firms turn to Hong Kong's capital markets to fund expansion. Iluvatar CoreX shares rose 4.1 percent on Wednesday, suggesting the market viewed the capital injection positively despite the dilution from the 5.5 percent increase in share count.

Iluvatar CoreX designs graphics processing units for AI training and inference, competing with Nvidia Corp. in China's domestic chip market. The company's chips are manufactured at advanced process nodes, though it did not disclose the specific foundry or node for its current products. The funds will also support software platform enhancements and developer ecosystem expansion, areas where Nvidia's CUDA platform maintains a dominant position.

The company plans to allocate part of the proceeds to selective strategic investments and acquisitions, as well as working capital. Other uses include accelerating iteration of existing products and commercializing next-generation product research and development, along with expanding scenario-based solutions in key industries.

For investors, the placement means Chinese AI chipmakers require substantial capital to close the technology gap with global leaders. Nvidia, trading at about 35 times forward earnings, generates more than $60 billion in data center revenue annually. Iluvatar CoreX's ability to capture market share will depend on its execution on product roadmaps and the effectiveness of its software ecosystem — areas the company is now funding with this raise.

This article is for informational purposes only and does not constitute investment advice.