GeniTech M97 Smart-Driving Chip May Enter Geely Supply Chain

GeniTech M97 Chip May Expand Into Geely's Supply Chain

The GeniTech M97 smart-driving chip developed by GeniTech Co Ltd (Shenji), the chip unit of Nio Inc (NYSE: NIO), may enter Geely Auto's (HKEX: 0175) supply chain, potentially expanding the technology's reach to third-party automotive customers. Geely's preliminary plan is to use two M97 chips to develop an L3 autonomous driving system, according to local media outlet 36Kr, which reported the development on Wednesday, citing people familiar with the matter. The report did not disclose whether the companies had signed a nomination or supply agreement.

The report also did not provide details on potential vehicle models, procurement volumes or the timing of mass production. Even so, the development represents a more concrete indication of potential cooperation than an earlier report in March. At that time, 36Kr reported that Shenji and its partner Axera Semiconductor were pitching the chip to automakers including Geely and Leapmotor (HKEX: 9863). The latest development therefore indicates that discussions with at least one prospective automaker may have progressed further, although no formal supply commitment has been publicly confirmed by the companies involved.

M97 Targets High-Compute Driver Assistance Applications

The M97 is the first driver-assistance chip jointly developed by Shenji and Axera for third-party customers, with more than 700 TOPS of computing power. The chip is positioned against Horizon Robotics' (HKEX: 9660) Journey 6P, which provides 560 TOPS. Axera previously said the M97 was scheduled for release in the third quarter. Its positioning reflects the growing demand among automakers for high-compute hardware capable of supporting increasingly advanced driver-assistance and autonomous-driving functions while maintaining greater flexibility over vehicle software and algorithm development.

Beyond Geely, Leapmotor and Chery (HKEX: 9973) have also shown interest in the M97, according to 36Kr, although the report did not disclose the progress of those discussions. Some Chinese automakers are seeking more competitively priced domestic high-compute chips while retaining control over their driver-assistance algorithms. This combination of potentially lower hardware costs and greater control over software creates a possible market opening for the M97 among automakers looking for alternatives in the high-compute driver-assistance chip segment.

Shenji Builds External Technology Business

Shenji has made initial progress in supplying its technology externally and has secured a nomination for an edge-inference project from the government of Hefei, Anhui province, according to 36Kr. The external projects provide an early indication that the technology developed within Nio's ecosystem could generate applications beyond the company's own vehicle programs. However, the available information does not establish the scale or commercial value of the Hefei project beyond the nomination, and no broader production commitments for third-party automotive customers have been publicly disclosed.

Nio has not disclosed details of the cooperation between Shenji and Axera. In a March report, 36Kr said industry sources characterized the arrangement as relatively complex because it was neither a straightforward intellectual-property purchase nor direct procurement of an existing chip. Engineers from the two companies jointly developed a customized chip for external customers based on Shenji's core modules and architecture. This structure allows the technology to be adapted for third-party applications while building on Shenji's existing technical foundation, rather than treating the external program as a conventional off-the-shelf chip transaction.

Licensing Revenue Could Increase With Chip Shipments

The technology-supply arrangement has already generated hundreds of millions of yuan in licensing fees for Nio, according to Wednesday's 36Kr report, citing an industry source close to Axera. Nio's returns could increase further if shipments of the jointly developed chip expand. The potential financial benefit therefore extends beyond direct hardware sales and includes licensing-related income associated with external technology deployment. However, the report did not disclose the specific licensing terms, shipment commitments or commercial structure underlying the reported fees, leaving the eventual contribution to Nio's financial performance uncertain.

Shenji raised 2.257 billion yuan ($330 million) in its first funding round in February, giving the company a post-money valuation of 8.27 billion yuan. Following the transaction, Nio Inc continued to hold a controlling 62.7% stake in Shenji through a subsidiary. Nio's continued control means that expansion of Shenji's external technology business could potentially provide additional strategic and financial value to the broader Nio group. The funding also provides Shenji with a stronger capital base as it develops its technology and pursues opportunities with third-party customers.

Nio's In-House Chip Already Deployed Across Its Lineups

Nio's in-house developed Shenji NX9031 smart-driving chip has been deployed across the entire Nio and Onvo vehicle lineups, demonstrating the company's existing use of internally developed computing hardware. Its cumulative shipments had exceeded 300,000 units as of July. The NX9031 deployment provides an established production base for Nio's chip-development strategy, while the potential expansion of the jointly developed technology to external automakers could represent a separate stage of commercialization. Any confirmed adoption by Geely or other automakers would therefore broaden the reach of Shenji's technology beyond Nio-controlled vehicle programs.

Frequently Asked Questions

What is the potential Geely and Shenji M97 cooperation?
The reported plan would involve Geely using two M97 chips to develop an L3 autonomous driving system, potentially making the program an important third-party application for Shenji's technology. 36Kr reported that the plan was preliminary and did not confirm a nomination or supply agreement between the companies. The report also provided no information about vehicle models, procurement volumes or mass-production timing. Geely is one of several Chinese automakers reportedly interested in the chip, alongside Leapmotor and Chery, while discussions with those companies remain at undisclosed stages.