China’s Zhipu AI launches US$560 million share sale as Hong Kong’s IPO tech race heats up

Zhipu AI’s new US$560 million share sale is a big signal that Hong Kong’s “tech IPO race” is not just back—it’s accelerating into 2026. In plain terms: one of China’s best-known large-model (LLM) start-ups is selling shares to the public in Hong Kong, hoping to raise fresh capital for an expensive AI arms race, while the city’s market is seeing a year-end surge of listings led by AI and semiconductors.

Below is what is going on with intelligence finance, around the world. I will tell you the story of what’s happening why it is important and what it means for artificial intelligence finance.

1) So what exactly happened with the share sale: let me tell you about the share sale, in words. The share sale is when people who own shares in a company sell those shares to people. This share sale is like when you sell something you own to someone. The people who sell the shares get money and the people who buy the shares now own a part of the company. The share sale can happen for reasons like the people who own the shares want to get money or they think the company will not do well. The share sale is a thing that happens with companies and it can affect the people who own shares in the company and the company itself.

Zhipu AI—a Chinese artificial intelligence company also marketed overseas as Z.ai—has launched a Hong Kong IPO share offering designed to raise about HK$4.35 billion (roughly US$560 million). Reports describe the IPO as positioning Zhipu to become the first “large-language-model developer” to list on the Hong Kong Stock Exchange, a milestone Hong Kong’s market has been eager to claim as it competes with New York, Shanghai, and Shenzhen for “next-generation tech champions.”

From the reporting available:

The offering involves tens of millions of shares and an IPO pricing that implies a multi-billion-dollar valuation (around the mid-single-digit billions in USD terms).

A portion of the deal is typically allocated to retail investors (reports mention around 10% in some coverage), with the rest going to institutional buyers.

The planned trading debut is early January 2026 (coverage points to January 8).

So even if we do not pay attention to all the talk about it the main thing to remember is this: Zhipu is going public at a time when companies that work with Artificial Intelligence are spending a lot of money. They are spending money on things like training models. Buying special computer parts called GPUs or renting computers. They are also spending money on hiring people. Having money, from the public can be a help for Zhipu to stay in business.

2) So why is Zhipu doing this now? I think it is because of the economics of building Artificial Intelligence models. Zhipu is looking at the economics of building Artificial Intelligence models and that is why they are doing this now. The thing is, building Artificial Intelligence models, like these is a really big deal. Zhipu is really focused on the economics of building Artificial Intelligence models.

The timing makes sense when you look at the economics of Artificial Intelligence:

AI is capital intensive—especially for “frontier” models

Training and running Large Language Models and multimodal models requires a lot of things.

Large Language Models and multimodal models need things like

* a lot of computer power

* a lot of data to learn from

* people who know what they are doing to take care of Large Language Models and multimodal models.

You have to take care of Large Language Models and multimodal models to make sure they work properly and do not make mistakes.

Large Language Models and multimodal models are very good, at doing things. They need help from people to work well.

massive computing power (chips, cloud time, data centers),

expensive engineering teams,

It takes a time for research and development to pay off before the company actually starts making money from the product and this is because research and development cycles are really long before research and development profits show up.

and continuous iteration to keep up with competitors.

That is why artificial intelligence labs all over the world whether they are, in the United States, China or some other place are operating at big losses as the artificial intelligence labs try to get bigger.

And filings/coverage around China’s AI IPO wave emphasize exactly this point: these firms often have fast growth narratives but heavy cash burn, with a lot of spending tied to compute.

External pressure: restrictions + competition

The pressure to go public now is rising for another reason. Chinas AI firms have to deal with a lot of things when it comes to chips and working with other companies around the world. This makes it really important for them to have a flow of funding. At the time there is a lot of competition, in the world of AI. If Chinas AI firms do not have money to buy the computers they need their models will not be as good as they could be. Then the big companies that use their services might decide to go else. Chinas AI firms need to be able to keep up with the competition and going public now can help them do that.

The initial public offering is not about being prestigious it is about the initial public offering giving a company the money it needs to keep going for a long time the initial public offering is, like a way for a company to buy time to grow and develop.

3) So why did they choose Hong Kong? The people in charge of the market in Hong Kong want it to be the place where people list their Artificial Intelligence companies. They really want Hong Kong to be known as the place for Artificial Intelligence listings. This is why Hong Kong is trying to become the hub for Artificial Intelligence listings. The market, in Hong Kong is working hard to make this happen and become the Artificial Intelligence listing hub.

Hong Kong has been working to strengthen its role as a global financial center and to attract more listings, including from fast-growing tech sectors. Recent official commentary and market data show Hong Kong has been actively pushing areas like AI, biotech, and innovation as growth engines.

A resurgent IPO window

The thing that is different now is that the environment, for companies going public or the initial public offering environment seems to have gotten a lot compared to the slow times that many markets had before. The initial public offering environment has really improved.

Reuters reporting highlights that Hong Kong’s equity fundraising surged in 2025 (with totals cited in the tens of billions of dollars), with a year-end rush of listings and strong aftermarket performance for multiple new IPOs.

When markets reopen like this stage private companies often rush to list because they want to take advantage of the situation. Stage private companies do this for a few reasons. Stage private companies think it is a good time to go public.

* They want to raise money for stage private companies

* They want to give shareholders of stage private companies a chance to sell their shares

Late-stage private companies are trying to make the most of the situation when markets reopen like this.

The valuations will either become stable or they will go up the valuations are going to be okay.

When we talk about money liquidity improves. This means it is easier to get cash when you need it. Liquidity. That is a good thing because it helps people and businesses. Liquidity. This is something that happens over time.

and investor risk appetite returns—especially for “strategic” themes like AI and chips.

The initial public offering of Zhipu is happening at that time. Zhipus initial public offering is taking place during this period. The Zhipu initial public offering is right, in the middle of this time frame.

4) The part where the tech race gets really competitive: Zhipu is not the one. MiniMax and other companies are getting ready to join in too.

This is not a story about one company. It is like a group of companies running together like they are in a big race. The companies are all moving forward at the time it is, like a pack sprint.

MiniMax and the competition to be first

Coverage indicates that MiniMax, another Chinese AI firm, is also moving quickly toward a Hong Kong listing and raising hundreds of millions of dollars, with big-name cornerstone investors mentioned in reporting.

The race thing is important because being first can bring:

media attention and brand credibility,

a “category leader” perception among enterprise buyers,

This can also lead to a reaction, from the market. Investors often like the company that only does one thing in a new area they are willing to give that company more money.

Artificial intelligence is not the thing that is happening. Computer chips and what people call “hard tech” are also taking up a lot of space in the pipeline. Artificial intelligence and these other technologies like computer chips are all being worked on at the time. This means that the pipeline is getting pretty crowded, with intelligence and hard tech like computer chips.

The same wave includes semiconductor-related names and other tech-heavy firms. That broad pipeline strengthens the narrative that Hong Kong wants to be the place where “China’s strategic tech” gets priced and financed internationally.

5) Why public investors might care: what they are really buying when they invest in the companies the public investors are actually buying a part of the company so the public investors might care about what the public companies are doing with their money because the public investors are really buying the companys future and the public investors want to know what they are getting for their money and that is what the public investors are really buying.

When people invest in a company that uses Artificial Intelligence. It goes public like Zhipu they are basically buying a lot of ideas. They believe in the Artificial Intelligence company. What it can do. These people think that the Artificial Intelligence company will be successful. They have faith, in the Artificial Intelligence technology that the company is using. The investors are putting their money into the Artificial Intelligence company because they think it will make money in the future. They like the Artificial Intelligence products that the company is making. The investors are hoping that the Artificial Intelligence company will grow and become very big.

Artificial Intelligence demand will just keep getting bigger and bigger

People who invest money think that companies and regular people will keep using intelligence. This includes things like computer programs that talk to people helpers that assist with writing code and machines that can search for things. There are also automated systems that help customers and understand documents. Some of these intelligence things can even do more, than one thing at a time like artificial intelligence search and customer support automation and document intelligence and multimodal tools and chatbots and coding assistants and agents.

(B) Scale is going to make some companies very successful the scale will create winners.

People think that Artificial Intelligence may work in a way where one or two platforms get a big piece of the action. This means a few platforms will get a lot of traffic they will be used by a lot of businesses. They will be the place where most developers want to work with Artificial Intelligence.

(C) “Strategic value”

Even if the company does not make a lot of money now investors may still think about the future of the company and decide what the stock is worth based on that. Investors may price in the fact that the company will do better, on.

long-term platform value,

potential government/enterprise alignment,

and optionality: partnerships, acquisitions, or ecosystem plays.

That is the good part. The reality is, Artificial Intelligence Initial Public Offerings also have some problems.

6) The big things that investors are really worried about. Why these things are important to investors like the big risks investors will see. Investors will be watching the risks closely because the big risks can affect investors in a big way. The big risks are a concern, for investors.

Risk 1: Losses and ongoing cash burn

Multiple sources discussing China’s AI IPO candidates note that these companies can be deeply unprofitable because development and compute costs rise quickly.

So when you are an investor you have to ask yourself:

The company needs to figure out if it can make money than it spends. Can the company make its revenue go up faster than its costs go up? This is a question, for the company because it wants to make sure it has enough money to do all the things it needs to do. The company has to think about how it can increase its revenue without letting its costs get too high.

The company will probably change its focus from spending a lot of money on training and computing to making profit from the products it sells. This means that of putting all its money into training and computing the company will try to make its products more profitable. The goal is to increase product margin expansion, which’s just a fancy way of saying that the company wants to make more money from each product it sells. So the company will shift its spending from training and computing to product margin expansion, which’s the same thing, as making more profit from its products.

Risk 2: Differentiation is hard

In Artificial Intelligence the difference in how good modelsre can get smaller really fast. This is because models that are open to everyone can affect how much things cost. If people who use these models think they are all the same then the people selling them do not have much control, over the prices of Artificial Intelligence models.

Risk 3: Regulatory + geopolitical friction

AI is something that is connected to how we control our data discussions about security and rules, about what can cross country borders. If things get stricter this can affect AI in ways such as:

access to advanced chips,

overseas partnerships,

and international expansion.

Risk 4: IPO market mood swings

Hong Kong is really hot now but peoples feelings about initial public offerings can change fast. This can happen if things like interest rates around the world what is going on with countries or the value of technology companies change. The sentiment, about public offerings can shift quickly because of these things. Hong Kong and initial public offerings are what people are watching.

7) Why this matters beyond Zhipu: Hong Kong’s bigger strategy

If we take a step back and look at the picture Zhipus initial public offering is also a story about Hong Kongs position in the world. It tells us something about where Hong Kong stands. Zhipus IPO is a deal and it says a lot about Hong Kongs role. The story of Zhipus IPO is really, about Hong Kongs place.

Hong Kong is looking for companies that will lead the way in the economy. These companies are like flagships that will show the way to others in the economy. The city of Hong Kong wants to find these new economy flagships and support them.

The new economy, in Hong Kong is very important. These flagships will play a big role in it. Hong Kong needs these new economy flagships to move and be successful.

It is not enough to have traditional finance companies, property businesses and old economy giants listed.

The fact that we are the place where Artificial Intelligence and computer chips companies are listed means we are important and relevant to the economy.

Artificial Intelligence and computer chips are the future so being the listing venue, for Artificial Intelligence and chips is a deal.

When you have a lot of things in the works it is like a chain reaction. A deepening pipeline makes a network effect. This network effect is really powerful because it is like a circle. The deepening pipeline helps to make the network effect stronger. The more things you have in the pipeline the more the network effect grows. A deepening pipeline is very important, for making a network effect.

If Zhipu and its peers have a listing then more companies like Zhipu will think about Hong Kong. When this happens analysts and fund managers will get to know Zhipu and its peers which can help them make better decisions, about the future value of Zhipu and its peers.

Chinas tech capital markets are changing to keep up with things. The tech capital markets, in China are doing this so they can stay ahead. Chinas tech capital markets are getting used to things.

When some companies have a time listing their stocks in other places Hong Kong is a good option. Hong Kong companies are close to mainland China. They are also part of a big international market with investors from all around the world. Hong Kong is like a bridge between mainland China and the rest of the world. This makes Hong Kong a natural choice, for companies that want to list their stocks in a place that is connected to mainland China. Also has a lot of international investors.

Reuters reporting shows a strong year-end IPO surge and expectations that momentum can carry into 2026.

8) What to watch next (the “scoreboard” for this tech IPO race)

To see if Zhipus IPO is actually doing well not just taking place here are the things to look for:

* We need to check the indicators, for Zhipus IPO.

Zhipus IPO is what we are focusing on so we have to look at the signs that show us how Zhipus IPO is performing.

Cornerstone/institutional demand

When a company gets anchor orders it can really help to make the deal more stable. This is because strong anchor orders can also have an impact on how well the company does after the deal is made. Strong anchor orders are very important for the companys aftermarket performance. They can make a difference in how successful the company is after the deal. Strong anchor orders are really good, for the company.

Retail subscription

When people really want to buy things from stores it can make the market move a lot at the beginning of the day.. This high demand, from retail stores can also make the market go up and down really fast. The retail demand is what is important here. It can really affect the retail market.

First-week trading performance

When a company has a first day on the stock market it can really help other companies that are planning to go public. On the hand if a company has a weak first day it can make other companies think twice about going public. This is because a weak debut can make investors nervous and that can stop companies from moving forward with their plans. A strong debut is good for the market because it shows that investors are interested in buying stock. The Initial Public Offering or IPO is a deal for companies and a strong debut can pull other IPOs forward.. A weak debut can freeze the pipeline and that is not good, for anyone.

Use of proceeds clarity

Investors like to see a clear path: model R&D, platform expansion, partnerships, and working capital—rather than vague spending. (Some coverage describes proceeds allocation toward core AI R&D and related buildout.)

Revenue trajectory and unit economics over the next 2–4 quarters

People who invest money are really interested in seeing if the company can make money from what they sell even if they are not making a lot of money yet. They want to know if the company can increase its margins, which is the money the company makes after paying for the things it sells. They also want to see if the company can get big contracts, with other companies because that means the company will have more work and can make even more money from these enterprise contracts.

9) The bottom line

The Zhipu AI company is selling shares US$560 million and this is big news because it has three big things happening all at the same time: the Zhipu AI company is doing something that combines these three powerful trends. The thing, about the Zhipu AI company and its US$560 million share sale is that it is very interesting.

AI companies need enormous capital to compete (compute, talent, and product scaling).

Hong Kong’s IPO market has regained momentum, creating a window where tech firms can float big deals.

A cluster of AI and semiconductor firms are racing to list, turning Hong Kong into a near-term battleground for “who becomes the first publicly traded China LLM champion.”

If Zhipu prices well and trades strongly after listing, it could pull more AI unicorns into Hong Kong faster—and make 2026 look like a landmark year for Asia’s AI capital markets. If it struggles, it will still be a landmark, but as a warning: that “AI narrative” is not enough without convincing economics.