China’s artificial intelligence race just created another big winner.
When CXMT Corp., China’s leading memory chipmaker, made its stock market debut, most of the attention was on the company itself. But another name quietly emerged among the biggest beneficiaries: Liang Wenfeng, the founder of DeepSeek.
Through his hedge funds, Liang secured one of the largest allocations in the IPO, leading to an estimated 820 million yuan (US$121 million) in paper gains on the very first day of trading.
The story is not just about one investor making money. It reflects how China is accelerating its push towards AI and semiconductor self-reliance, while investors rush to back companies at the centre of that strategy.
A Record IPO for China’s Memory Champion
CXMT, short for ChangXin Memory Technologies, is one of China’s most important semiconductor companies.
The company manufactures DRAM (Dynamic Random Access Memory) chips, an essential component used in:
- AI servers
- Data centres
- Smartphones
- PCs
- Cloud infrastructure
- Autonomous vehicles
As AI models become larger and more powerful, the demand for memory chips continues to rise. Every AI server requires massive amounts of high-speed memory, making DRAM one of the most important parts of the AI supply chain.
That is exactly why CXMT has become strategically important for China.
The company’s IPO raised around US$10 billion, making it the second-largest IPO in Chinese history.
Investor enthusiasm was extraordinary.
Some numbers that stand out:
- Retail investors submitted 9.4 million applications
- Total bids reached 7.07 trillion yuan
- The retail offering was 212 times oversubscribed
- Shares surged 466% on the first day, closing around 49 yuan
For many investors, getting an allocation was almost impossible because demand was so much higher than the number of shares available.
How Liang Wenfeng Benefited
Liang Wenfeng is best known today as the founder of DeepSeek, whose AI models have attracted global attention.
Long before DeepSeek became a household name, Liang built his reputation in finance through quantitative investing.
His two investment firms:
- High-Flyer Quant Investment Management
- High-Flyer Asset Management
received a combined allocation of 20.2 million shares, the highest among more than 100 Chinese private hedge funds participating in the IPO.
When CXMT’s shares jumped on listing day, those holdings generated an estimated 820 million yuan in paper gains.
It is important to remember that these are paper gains, meaning the value is based on the current market price. The profit only becomes realised if the shares are eventually sold.
Why Are Hedge Funds Interested in IPOs?
Many quantitative funds in China actively participate in IPO subscriptions.
The reason is simple.
Historically, many Chinese IPOs have delivered very strong gains on their first day of trading.
For quantitative funds, IPO allocations can:
- Improve annual returns
- Diversify trading strategies
- Add relatively low-risk opportunities when allocations are received
In a market where first-day rallies have become common, IPO investing has become an important strategy for many institutional investors.
Mutual Funds Received Even Bigger Allocations
While hedge funds received significant allocations, mutual funds received an even larger share.
According to market data:
- Around 100 mutual fund companies received 1.3 billion shares
- That is almost eight times the allocation received by private hedge funds
- E Fund Management received the largest allocation, with 169 million shares
This highlights the strong participation from institutional investors across China’s financial markets.
Why CXMT Matters Beyond One IPO
The excitement around CXMT is about much more than one company’s listing.
China has made semiconductor independence a national priority.
Restrictions on advanced chip technology from the United States have encouraged China to invest heavily in domestic semiconductor manufacturing.
Memory chips are one of the most critical components in modern computing.
If China can build competitive domestic memory producers, it reduces reliance on foreign suppliers while strengthening its AI ecosystem.
CXMT sits at the centre of that strategy.
As AI adoption continues to expand, companies producing essential hardware are becoming just as important as the companies building AI software.
China’s AI Supply Chain Is Becoming an Investment Theme
The success of CXMT also reflects a broader trend.
Investors are increasingly looking beyond AI applications and focusing on the companies supplying the infrastructure behind AI.
That includes businesses involved in:
- Memory chips
- Semiconductor manufacturing
- Optical networking
- Power infrastructure
- Advanced packaging
- Data centre equipment
These businesses may not always receive the same headlines as AI software companies, but they play a crucial role in enabling AI at scale.
The Bigger Picture for Investors
The CXMT IPO shows how powerful long-term industry trends can be.
A few key takeaways stand out:
AI is creating opportunities across the entire value chain.
Investment opportunities are not limited to AI models and software. Hardware companies are becoming equally important.
Semiconductors remain a strategic industry.
Governments around the world continue to invest heavily in domestic chip production because semiconductors have become critical economic and national security assets.
Institutional investors move early.
Large hedge funds and mutual funds often position themselves before companies become widely discussed after listing.
IPO enthusiasm can be intense.
While spectacular first-day gains attract attention, they also remind investors that IPO pricing and early trading can be extremely volatile.
Final Thoughts
The CXMT IPO is another reminder that the AI revolution is creating winners far beyond the companies building chatbots and AI models.
For Liang Wenfeng, the listing translated into an estimated US$121 million in paper gains through his hedge fund investments.
For China, the successful IPO represents another step towards building a stronger domestic semiconductor industry.
And for global investors, it reinforces an important lesson.
Sometimes the biggest opportunities are found not only in the companies using AI, but also in the businesses supplying the essential technology that makes AI possible.