Chinese chip startup Shanghai Biren Intelligent Technology Co. is considering an initial public offering in Hong Kong as soon as this year, according to people familiar with the matter, aiming to capitalize on a wave of local clients turning to its AI chips as an alternative to banned Nvidia Corp. silicon.

The company is planning to file for the first-time share sale as soon as the coming weeks, said the people, who asked not to be identified as the information is private. Meanwhile, the startup is also in talks with investors including state-backed funds in Guangzhou for a separate funding round, which could raise about 2 billion yuan ($279 million), the people said.

Deliberations are ongoing and Biren hasn’t decided on the size of the IPO, the people said. The details of the prospective fundraising including size and timeline could still change, they added. The company didn’t respond to requests for comment.

Biren’s fundraising efforts come as the Chinese government accelerates its campaign to develop its domestic semiconductor industry, after a US-led effort that blocked Chinese companies’ ability to buy advanced chips, including some Nvidia products used to develop artificial-intelligence capabilities. Founded in 2019, Biren focuses on areas such as graphics processing units and cloud computing, and is considered one of the most promising domestic contenders to Nvidia, the leader in the field.

The startup has raised about 4.7 billion yuan from investors including IDG Capital, Ping An Insurance Group Co. and China Merchants Capital. Last year, it was seeking to raise funds again at a valuation of 17 billion yuan ($2.4 billion), Bloomberg News reported at that time. It also declared in August 2022 it had released the first general-purpose graphics processing unit, “setting a new record in global computing power.”

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Biren’s ambitions for chipmaking have been put to the test amid sweeping restrictions from President Joe Biden’s administration on China’s access to semiconductor technology. Taiwan Semiconductor Manufacturing Co., the world’s leading maker of customized chips for companies like Apple Inc., suspended production of advanced silicon for Biren to ensure compliance with US regulations, Bloomberg News reported in October.

Back in the local market, Biren’s products are getting traction among major Chinese firms as it’s gearing up for its Hong Kong IPO, according to the people. The startup has secured orders from SenseTime Group Inc., which recently unveiled a suite of new AI services including SenseChat, a challenger to the AI phenom ChatGPT, the people said.

SenseTime declined to comment. TSMC declined to comment on any customer relationships, but said that, as a law-abiding company, it complies with all relevant rules and regulations.

--With assistance from Jane Zhang, Gao Yuan, Debby Wu and Edwin Chan.