U.S. Blacklists Sophgo Technologies, AI Chip Firm Linked to Bitmain Co-Founder
The U.S. has added Sophgo Technologies, a leading AI chip firm owned by Bitmain co-founder Zhan Ketuan, to its trade blacklist. The blacklisting is reportedly due to concerns that Sophgo’s chips might end up in Huawei products, thus dodging sanctions.
Concerns Over Sophgo’s Ties to Beijing
According to U.S. officials, Sophgo was “acting at the behest of Beijing” to boost China’s chipmaking capabilities. This move has raised eyebrows, particularly given Sophgo’s connections to Bitmain, a dominant player in the Bitcoin mining hardware market.
The trouble began when Zhan shifted resources to AI chip development, causing internal conflict within Bitmain. This move was part of Zhan’s efforts to expand the company’s focus beyond crypto hardware. In 2017, Zhan stated, “We are a company focused on high-performance processors. We started with cryptocurrency processors and now we’re entering artificial intelligence, it’s a new area of application but not a complete pivot.”
The blacklist puts Sophgo in a difficult position, cutting it off from Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading chipmaker. Some worry that this could also affect Bitmain, although TSMC insists it’s in full compliance with global regulations.
Zhan’s journey began in 2013 when he teamed up with Wu Jihan, a crypto enthusiast, to create Bitmain. The company quickly rose to dominate the Bitcoin mining hardware market, hitting $2.5 billion in revenue by 2017. Bitmain also owns BTC.com and Antpool, which have been among the largest Bitcoin mining pools.
Some notable milestones in Bitmain’s history include:
- June 2018: Wu announced that Bitmain was considering an IPO to allow early investors to cash out.
- August 2018: Bitmain completed its $1 billion pre-IPO registration with the Hong Kong Stock Exchange.
- September 2018: Bitmain filed for its IPO.
- March 2019: Bitmain’s IPO application in Hong Kong expired, six months after being filed, with investors reportedly worried about the drop in Bitcoin’s value.
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