Sequoia’s Former Chinese Arm Backs Another Nvidia Challenger

HongShan, a prominent Chinese venture capital firm that recently separated from Sequoia Capital, has invested in a startup that competes with U.S. artificial intelligence chip giant Nvidia in the Chinese market, according to three people with knowledge of the matter. It’s the latest of several investments HongShan has made in domestic AI chip startups.

HongShan’s previously unreported investment in Shanghai-based Iluvatar CoreX, which investors earlier valued at more than $1 billion, comes as the U.S. has been trying to block China’s access to Nvidia’s most advanced chips through export restrictions, adding urgency to China’s efforts to develop homegrown alternatives. Led by Neil Shen, HongShan, whose name means “sequoia” in Chinese, is the biggest and most successful VC firm in China. Its investments are closely watched by other investors and founders as well as foreign government agencies involved in trade and technology battles with China.