Zhipu AI Hits Record $112 Billion Valuation in Hong Kong

Shares of Hong Kong-listed Chinese artificial intelligence developer Zhipu AI surged to a record high on May 28–29, briefly reaching HK$1,993 intraday and pushing the company’s market capitalization above HK$880 billion ($112 billion). The milestone marks a stunning nearly 1,600% increase since the company’s January 2026 IPO, underscoring investor enthusiasm for China’s leading AI firms despite persistent profitability concerns, according to Caixin Global.

Context: The Rise of China’s AI Tigers

Zhipu AI, founded in 2019 by researchers from Tsinghua University, is considered one of China’s so-called “AI tigers” — a group of startups building large language models to rival American AI giants like OpenAI and Anthropic. The company was the first major Chinese LLM developer to go public, listing on the Hong Kong Stock Exchange on January 8, 2026, at HK$116.20 per share with a valuation of approximately HK$51 billion ($6.7 billion).

As CNBC noted at the time, Zhipu’s debut made it “the first major Chinese LLM developer to go public,” with the firm “strongly backed by Beijing.” The listing was part of a broader wave of Chinese AI and tech IPOs that helped the Hong Kong Stock Exchange raise $36.5 billion from 114 new listings in 2025.

Financial Performance: Revenue Growth Amid Mounting Losses

Zhipu’s 2025 revenue rose 132% year-on-year to 724 million yuan ($99.5 million), though this slightly missed analyst expectations of approximately 760 million yuan, according to the South China Morning Post. The company reported total losses of 4.72 billion yuan, up 59.5% from the prior year, driven by research and development spending that jumped 44.9% to 3.18 billion yuan. Adjusted net losses reached 3.18 billion yuan, a 29.1% increase year-on-year.

CEO Zhang Peng described a strategic shift in the company’s business model during a post-earnings call. “Many clients that initially tried to deploy our open-source models locally are gradually shifting — at least partially — toward using our cloud-based API,” he said, as reported by SCMP.

Technological Milestones and Strategic Positioning

On May 22, 2026, Zhipu launched GLM-5.1-highspeed, an API variant of its flagship model delivering 400 tokens per second — reportedly the fastest inference speed among major global LLM providers, as reported by Pandaily. The high-speed API is initially being offered to select enterprise customers for use cases requiring real-time text generation, including automated content creation, coding assistants, and customer interaction systems.

A notable aspect of Zhipu’s strategy is its contrarian pricing approach. While competitors like DeepSeek and Xiaomi have slashed API prices to gain market share, Zhipu raised its API pricing by 83%. The bet appears to be paying off: the company’s Model-as-a-Service (MaaS) platform achieved an Annual Recurring Revenue (ARR) of 1.7 billion yuan by March 2026, a 60-fold increase year-on-year.

Broader Market Dynamics

The rally in Zhipu’s shares occurred alongside a broader surge in Hong Kong-listed AI concept stocks. Competitor MiniMax, which listed in Hong Kong on January 9 at HK$165, closed at HK$837 — over five times its IPO price — valuing it above HK$260 billion. According to YuanTalks, the rally reflects a scarcity premium for pure-play Chinese AI companies available to public market investors, combined with limited tradable shares due to lock-up periods.

Global AI investment reached 110 billion yuan in Q1 2026 alone, up 185.4% year-on-year, further fueling enthusiasm for the sector.

Risks and Challenges Ahead

Despite the remarkable rally, significant risks remain. At $112 billion, Zhipu trades at approximately 1,100x 2025 revenue — an extraordinary multiple that reflects a scarcity premium and limited tradable shares due to lock-up periods, rather than underlying earnings power. UBS analysts have flagged that such valuations are vulnerable to sharp corrections as lock-ups expire and share supply increases.

Zhipu also faces ongoing geopolitical headwinds. The company was placed on the US Commerce Department’s Entity List in January 2025 after US officials said it was working with China’s military. US restrictions on access to advanced semiconductor technology continue to constrain the company’s ability to train its AI models.

What to Watch

As lock-up periods expire in the coming months, increased share supply could pressure Zhipu’s stock price. The market will closely watch whether the company can narrow its losses while maintaining its rapid revenue growth trajectory. Continued rapid iteration of the GLM model family — Zhipu has released new foundation models every three to six months — will be critical to maintaining its competitive advantage against DeepSeek, MiniMax, and other rivals in China’s fiercely competitive AI landscape.