● Moore Threads CEO and founder said the job cuts would allow the company to consolidate resources and focus on GPU development

● Despite the looming lay-offs, Zhang brushed off the suggestion that this was ‘a moment of darkness’ for China’s GPU development

The MTT S80 graphics card from Moore Threads. 

Chinese graphic processing unit (GPU) start-up Moore Threads Intelligent Technology, which was added to a US trade blacklist last month, will start to lay off workers, according to local media reports, citing an internal letter by its founder.

The job cuts will be finalised this week, according to Chinese media Jiemian News on Monday, which cited an internal letter from company CEO Jams Zhang Jianzhong.

As part of a broader US export controls, Moore Threads and Biren Technology, two top Chinese artificial intelligence chip start-ups, were added to the US trade blacklist in October, citing their engagement in activities contrary to US national security and policy interests. That means they will struggle to find wafer foundry services, a similar predicament faced by Huawei Technologies after September 2020, among other hurdles such as restrictions on the use of US electronic design automation software.

Moore Threads did not immediately respond to a request for comment.

Zhang said in the letter that it was a tough but necessary decision for the sake of the company’s development. The job cuts would also consolidate resources to focus on its GPU development.

Both of the newly sanctioned Chinese companies have ties to the US. Biren was founded in Shanghai in 2019 by Wall Street veteran and Harvard Law School graduate Michael Zhang Wen, while Zhang was former general manager of Nvidia China before establishing his Beijing-based start-up in October 2020.

Moore Threads said earlier this year that it had begun mass production of two general-purpose GPUs, Sudi and Chunxiao, and had set chip self-sufficiency as its top priority.

GPU start-ups like Moore Threads have been the darlings of Chinese investors over the past few years as China doubled down on its efforts to use more domestically-produced semiconductors.

Zhang said the company has received a lot of support from government, investors, and partners during the past few weeks.

The company had raised a total of US$525.7 million as of December last year. In the latest round on December 23, it raised 1.5 billion yuan (US$205.4 million) of Series B funding in a deal led by Hexie Health Insurance and Hechuang Digital Private Equity Fund Management, giving it a pre-market valuation of 28.95 billion yuan, according to data from PitchBook, which tracks deals in private equity markets.

Despite the looming lay-offs, Zhang brushed off the suggestion that this was “a moment of darkness” for China’s GPU development, saying in the letter that “nothing will compromise” its resolve to make the best general purpose GPUs in China.

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