Chinese artificial intelligence company Zhipu AI has launched a $4 billion Hong Kong share sale, capitalizing on a staggering 1,500% rally in its stock price just months after its public listing. The offering, reported by Reuters and Bloomberg, is one of the largest secondary share sales by a Chinese AI firm to date and arrives at a pivotal moment for the country's red-hot AI sector.
The sale puts Zhipu — the company behind the GLM family of large language models — at the center of a debate over whether Chinese AI stocks can sustain the euphoric valuations they have reached this year. For readers who follow this publication's breaking AI news, Zhipu will already be a familiar name: its GLM 5.2 model and its CEO's public sparring with Elon Musk over China's frontier AI ambitions have made it one of the most closely watched companies in the field.
A rally that defies gravity
Zhipu's stock has surged roughly 1,500% since its initial public offering, Bloomberg and Yahoo Finance reported, with an earlier Bloomberg headline noting the company had at one point notched gains approaching 2,000%. That extraordinary run has pushed Zhipu's market capitalization past HK$1 trillion (about $128 billion), according to iChongqing, driven by investor excitement over its new model launches and hopes for faster commercialization.
The share sale lets early backers cash in on some of those gains. A term sheet reviewed by Reuters and The Standard (Hong Kong) confirmed the $4 billion offering size. It is the kind of blockbuster transaction that, in a calmer market, might signal peak euphoria — but in China's AI sector, it is being treated as a test of whether demand can absorb a flood of newly tradable shares.
The lock-up expiry pressure
The timing is no accident. This week marks the expiry of post-IPO lock-up periods for several Chinese AI startups, releasing large blocks of previously restricted shares onto the market. Tech in Asia reported that roughly $11.5 billion worth of shares in Zhipu and rival MiniMax are becoming tradable, while The Standard pegged the combined figure even higher at around $50 billion across the sector.
Lock-up expiries are typically moments of volatility, because early investors who were unable to sell can finally take profits. The risk is that a wave of selling overwhelms demand and sends shares sharply lower — exactly the scenario the share sale and cornerstone pledges are designed to head off.
Zhipu appears to be managing that risk deftly. According to one report, the stock actually surged 15% as the lock-up expired, after nearly 70% of cornerstone investors publicly pledged to hold their shares rather than sell. That show of confidence helped counter the typical post-lock-up selling pressure.
A stark contrast with MiniMax
The sector is not rising uniformly. While Zhipu has soared, rival MiniMax has gone in the opposite direction, with 36 Kr reporting its valuation has fallen from about $41 billion to roughly $10 billion. The diverging fortunes illustrate how merciless the market has become in separating winners from also-rans in the Chinese AI race.
Zhipu's ability to keep climbing while peers falter reflects investor bets that its GLM models, enterprise traction, and perceived position at China's frontier will translate into durable revenue. But the MiniMax pullback is a reminder that sentiment can reverse quickly, and that not every AI listing will be rewarded.
Where the money could go
While Zhipu has not detailed how proceeds from the secondary sale will be deployed, the priorities for a frontier AI lab at this stage are well established: securing more computing power, expanding its engineering and research headcount, and funding the next generation of GLM models. Zhipu has also been pushing into enterprise and developer-facing products, where revenue traction — not just raw model capability — increasingly determines how long a valuation can be justified.
The capital raise also gives the company a cushion as the cost of training frontier models continues to climb. Industry estimates put the price of training a single state-of-the-art model in the tens of millions of dollars, and labs competing at the frontier now run multiple such efforts in parallel. A successful sale at this scale would signal to partners and customers that Zhipu has the financial staying power to remain a top-tier player.
What the sale signals for Chinese AI
The $4 billion offering is, in effect, a real-time referendum on Chinese AI valuations. If it prices smoothly and the stock holds up, it will embolden other AI firms preparing listings or secondary sales and reinforce the narrative that China's AI champions can rival their US counterparts in both technology and market appeal. If it stumbles, it could trigger a broader reassessment.
The geopolitical backdrop adds weight to the moment. Zhipu's rise has unfolded alongside intensifying US-China competition over frontier AI, including disputes over model access, data security, and export controls. A successful capital raise would give Zhipu more firepower to invest in compute, talent, and research at a time when access to cutting-edge chips remains contested.
For now, the market is betting that Zhipu's momentum is real. Whether that bet pays off will become clearer once the freshly unlocked shares — and the $4 billion in newly offered stock — are fully in investors' hands.
