Bitmain co-founder’s AI chip venture blacklisted by US

The U.S. has added Sophgo Technologies, the AI chip firm owned by Bitmain co-founder Zhan Ketuan, to its trade blacklist.

The U.S. has blacklisted Sophgo Technologies, the AI chip company founded by Bitmain co-founder Zhan Ketuan, over concerns its chips might end up in Huawei products, dodging sanctions.

According to a Financial Times report, U.S. officials believe that Sophgo was “acting at the behest of Beijing” to boost China’s chipmaking capabilities. The report also mentions a tough time for Bitmain when Zhan shifted focus to AI chips, causing some internal struggles.

The trouble started when Zhan shifted resources to AI chip development. His push to move beyond crypto hardware caused internal conflict, the report notes.

“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.”

Zhan told a gathering in Beijing in 2017.

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The blacklist puts Sophgo in a tough spot, cutting it off from Taiwan Semiconductor Manufacturing Company, the world’s leading chipmaker. Some worry this could affect Bitmain too. TSMC, however, insists it’s in full compliance with global regulations, the report reads.

Zhan’s path started back in 2013 when he teamed up with Wu Jihan, a crypto fan, to create Bitmain. The company quickly rose to dominate Bitcoin mining hardware, hitting $2.5 billion in revenue by 2017. Bitmain also owns BTC.com and Antpool, which have been among the largest Bitcoin mining pools.

In June 2018, Wu announced that Bitmain was considering an IPO to allow early investors to cash out. The company went on to complete its $1 billion pre-IPO registration with the Hong Kong Stock Exchange in August and filed for its IPO in September. However, in 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.

Read more: Bitmain IPO suffers major setback as Hong Kong regulator declares crypto firms “immature”

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