Executive Summary / Key Takeaways

• Nano Labs is undergoing a profound strategic transformation, shifting its core focus from traditional mining machine sales to becoming a Web3.0 infrastructure provider with significant cryptocurrency strategic reserves, primarily BNB.
• The company has amassed substantial digital asset holdings, transitioning from an initial Bitcoin reserve of approximately $40 million to over 128,000 BNB tokens, valued at over $108 million, as of August 2025, underscoring a decisive commitment to this new asset class.
• Technological innovation remains a cornerstone, with the Cuckoo 3.0 chip offering "highest computing power and lowest power efficiency" and incorporating key AI chip technologies, positioning Nano Labs for growth in AI computing and Web3.0 integration.
• Despite a decline in traditional revenue streams in the first half of 2025, significant financing activities, including a $500 million convertible notes private placement and a $50 million direct offering, are bolstering liquidity to support the expanded BNB reserve strategy.
• The long-term outlook hinges on successful execution of its BNB-centric reserve strategy, the commercialization of AI-enhanced Cuckoo 3.0 chips, and expansion into stablecoin and metaverse services, all within a highly competitive and evolving Web3.0 and AI landscape.

A Bold Pivot: Nano Labs' Evolution in the Web3.0 Era

Nano Labs Ltd, founded in 2019, embarked on its journey as a fabless integrated circuit design company, specializing in computing chips, application-specific integrated circuits, smart network interface cards, and vision computing chips. While its early years were marked by initial losses, a significant revenue surge in 2022 signaled its potential in the burgeoning digital infrastructure space. The company's trajectory has since evolved dramatically, culminating in a "major transformation" in 2025 that redefines its core investment thesis: a strategic pivot towards Web3.0 infrastructure, anchored by substantial cryptocurrency reserves and advanced chip technology.

This strategic shift is unfolding against a backdrop of rapidly expanding demand for digital currency transactions and the accelerating evolution of AI. The global AI software market alone is projected to reach $251 billion by 2028, highlighting the immense opportunities for companies with integrated AI and Web3.0 capabilities. Nano Labs' history, from chip design to metaverse applications, now provides the foundational context for its ambitious current strategy, which seeks to capitalize on these converging trends.

Technological Edge: The Cuckoo 3.0 and AI Integration

At the heart of Nano Labs' long-term strategy lies its commitment to technological differentiation, particularly through its Cuckoo series chips. The company's newly launched Cuckoo 3.0 chip, an upgraded integration of the original Cuckoo 2.0, represents a significant leap forward. It features "significantly enhanced performance" and has achieved a "leading position globally," setting a "new global benchmark." This chip offers the "highest computing power and the lowest power efficiency" among Nano Labs' current products, a critical advantage in energy-intensive computing environments.

The Cuckoo 3.0's design incorporates features directly relevant to the burgeoning AI sector. It boasts high-bandwidth multichannel 3D DRAM and a dedicated distributed on-chip network, enabling efficient data exchange between computing and storage units. These are "key technology in AI chips" and provide a "comparative advantage for AI chip design." Furthermore, its specialized low-voltage circuit design aims to reduce power consumption, aligning with the growing need for energy-efficient AI solutions. Nano Labs is actively pursuing research and development in AI computing, Zero-Knowledge (ZK) computing, and other advanced chips, alongside innovations in packaging technology and intellectual property to enhance chip production efficiency. These technological advancements are expected to drive significant sales growth as the company launches various models equipped with the Cuckoo 3.0 chip for diverse application scenarios, from data centers to independent home use.

Strategic Reserves: A Decisive Shift to BNB

Nano Labs' most striking strategic move in 2025 has been its decisive pivot to cryptocurrency strategic reserves. Initially, the company established Bitcoin value investment as a new business sector in 2024, accumulating approximately 400 BTC with a total purchase price of around $40 million. Management viewed Bitcoin as a "strategic asset with long term value for reserves," crucial for the Web3.0 ecosystem, and a potential hedge against inflation.

However, 2025 marked a "major transformation" with a shift in core strategic reserve focus to BNB. This decision was based on a comprehensive assessment of BNB's "highly active ecosystem," "outstanding long-term growth potential and resilience," and its "model and platform value." As of the first half of 2025 earnings call, Nano Labs holds over 128,000 BNB. Recent disclosures indicate that by July 28, 2025, these holdings were valued at over US$108 million (based on a market price of US$850 per BNB), bringing the company's cumulative reserve of mainstream digital currencies, including Bitcoin and BNB, to around US$160 million. This strategic commitment is further solidified by a strategic equity investment in CEA, a BNB reserve company, and plans to apply for licenses for HKD and offshore RMB stablecoin businesses, including a partnership with Orbiter Finance to launch a compliant stablecoin cross-chain solution, NBNB.io.

Competitive Dynamics in a Transformative Landscape

Nano Labs operates in a highly competitive landscape, facing established giants and agile innovators in both the semiconductor and Web3.0 sectors. In fabless IC design and high-performance computing, direct competitors include industry leaders like NVIDIA Corporation (NVDA), Advanced Micro Devices (AMD), and Intel Corporation (INTC).

NVIDIA, with its dominance in GPUs and AI accelerators, boasts superior market penetration, a vast technological ecosystem, and robust financial performance characterized by consistent revenue growth and high profitability. AMD offers versatile chip architectures and strong growth trajectories in CPUs and GPUs. Intel, despite mixed results, possesses extensive intellectual property and global scale. Nano Labs, while demonstrating agility and a niche focus on specialized computing solutions, currently lags these larger rivals in overall market share, brand recognition, and the breadth of its technological ecosystem. Its financial performance, reflected in negative TTM operating and net profit margins of -237.24% and -231.35% respectively, and a high P/S ratio of 108.41, indicates a company in an earlier stage of monetization compared to its more mature competitors.

However, Nano Labs' proprietary Cuckoo 3.0 chip, with its "highest computing power and lowest power efficiency" and AI-specific features, offers a qualitative competitive advantage in targeted applications. This technology could enable "significantly higher efficiency" in specific use cases, potentially fostering stronger customer loyalty and better margins in niche segments. The company's research-driven approach to software development also positions it for "faster innovation cycles," potentially allowing it to exploit weaknesses in the slower innovation pace of some larger competitors. Indirect competitors, such as cloud computing providers developing in-house AI chips, also pose a threat by offering integrated ecosystems that could reduce demand for standalone hardware. Nano Labs' ability to leverage its technological distinctiveness and strategic focus on Web3.0 and AI integration will be crucial in carving out and expanding its market position against these formidable players.

Financial Performance and Capital Allocation

Nano Labs' financial performance in the first half of 2025 reflects a period of strategic transition and investment. Net revenue for H1 2025 was RMB 8.28 million (approximately USD 1.16 million), a notable decline from RMB 24.74 million in the same period of 2024. This decrease was primarily attributed to reduced sales volume of the Apollo V series product. The company recorded a gross loss of RMB 10.71 million (USD 1.5 million) for H1 2025, compared to a gross profit of RMB 30,000 in H1 2024. Net loss for H1 2025 was RMB 11.78 million (USD 1.65 million), an improvement from a net loss of RMB 59.15 million in H1 2024, partly due to significant reductions in operating expenses.

Research and development expenses, for instance, decreased by 89.1% to RMB 3.2 million in H1 2025, a result of "strategic adjustment in research and development activities."

Despite the decline in traditional revenue, certain segments showed promise. Revenue from 3D-printing products, part of the iPollo Metaverse business, demonstrated significant growth, increasing to RMB 459,200 in H1 2024 from RMB 22,000 in H1 2023.

To fuel its strategic pivot, Nano Labs has actively engaged in financing activities. As of June 30, 2025, cash and cash equivalents stood at RMB 3.06 million (approximately USD 50.77 million). In June 2025, the company announced a US$500 million convertible notes private placement and a US$50.0 million registered direct offering and concurrent private placement. Furthermore, an At The Market (ATM) Offering Agreement allows for the sale of up to US$45.00 million in Class A ordinary shares. These capital raises are explicitly aimed at supporting the "continued expansion of our BNB strategic reserve scale" and ensuring the "better execution of our Web3-related business initiatives." The confidence in this strategy is further underscored by CEO Mr. Jianping Kong's acquisition of 480,000 Class A ordinary shares in August 2025, following previous purchases.

Outlook and Risks

Nano Labs' outlook is firmly anchored in the successful execution of its dual strategy: expanding its BNB strategic reserves and commercializing its advanced chip technology, particularly the Cuckoo 3.0, within the AI and Web3.0 ecosystems. Management anticipates that the launch of complete machines equipped with the Cuckoo 3.0 chip in the second half of 2024 and the first half of 2025 will drive significant sales growth. The company also expects its 3D printing services and new product lines to contribute to future revenue. The long-term vision includes a commitment to "AI plus Web3.0 in the future," with management believing that a focus on product quality will lead to "explosive growth."

However, this ambitious transformation is not without risks. The inherent volatility of cryptocurrency markets poses a significant risk to the value of Nano Labs' strategic reserves. Execution risk associated with the rapid strategic pivot, including the successful integration of new business models and the effective deployment of capital for crypto acquisitions, is also a key concern. While R&D expenses were strategically reduced in H1 2025, sustained innovation is critical in the fast-evolving semiconductor and AI industries. Furthermore, the company faces intense competition from well-capitalized and technologically advanced players. The ability to translate technological advantages into market share and sustained profitability, especially given its current negative margins and high valuation multiples, will be paramount.

Conclusion

Nano Labs is at a pivotal juncture, undergoing a profound strategic metamorphosis from a traditional chip design and mining machine provider to a Web3.0 infrastructure company with a significant emphasis on cryptocurrency strategic reserves and AI-enhanced computing. The decisive pivot to BNB as its core reserve asset, backed by substantial financing efforts and management's conviction, signals a bold commitment to the evolving digital economy. Concurrently, the Cuckoo 3.0 chip, with its superior performance and integrated AI capabilities, positions Nano Labs to capture opportunities in the convergence of AI and Web3.0.

While the company's recent financial performance reflects the challenges of this transition, with declining traditional revenue and ongoing losses, the strategic investments in digital assets and advanced technology lay the groundwork for potential long-term value creation. The success of Nano Labs will ultimately depend on its ability to effectively execute its BNB reserve strategy, rapidly commercialize its AI-enhanced Cuckoo 3.0 chips, and navigate the highly competitive landscape. For discerning investors, Nano Labs presents a compelling, albeit high-risk, opportunity to participate in a company undergoing a strategic rebirth at the forefront of the Web3.0 and AI revolution.