Zhipu Leads China’s ‘AI Tigers’ With Hong Kong IPO

Tiger, tiger, burning bright. If you crave knowledge, then read about this Chinese “AI tiger” and its strong start.

Shares of Zhipu edged higher on their Hong Kong debut, following a $558 million initial public offering that made it the first of China’s AI tigers to go public. These tigers are a small group of startups tasked with building advanced large language models capable of competing with U.S. companies such as OpenAI and Anthropic.

The firm, a.k.a. Knowledge Atlas Technology JSC, saw its stock rise as much as 15% above its offer price of HK$116.20 ($15) today (Jan. 8), with around 37.4 million shares sold.

According to CNBC, by mid-session, gains had moderated but the shares remained comfortably above the issue price, reflecting solid investor demand for exposure to China’s fast-growing AI sector.

The IPO valued Zhipu at around HK$4.3 billion, making it one of the larger AI flotations in recent years and a rare public-market listing for a Chinese LLM developer. The debut comes as Hong Kong seeks to reassert itself as a preferred listing venue for high-growth technology companies amid a gradual recovery in new offerings.

A milestone for China’s AI industry

Founded in 2019 by researchers from a top Chinese university, Zhipu represents China’s first major LLM company to reach public markets through an IPO. Its listing marks a significant milestone for the country’s broader AI industry, which has been under pressure from tightening U.S. technology restrictions and a subdued domestic venture capital environment.

Until recently, most AI-related listings in China have been dominated by semiconductor designers, equipment makers, and data infrastructure firms. Zhipu’s flotation signals that investors are increasingly willing to back application-layer AI companies, particularly those focused on foundational models that can be deployed across industries ranging from finance to healthcare and government services.

Strong state backing and strategic importance

Zhipu is widely viewed as a strategically important company within China’s technology ecosystem and is strongly backed by Beijing-linked investors.

The emergence of these firms reflects China’s push to reduce reliance on foreign AI technology and to build domestic alternatives that can operate within the country’s regulatory and data frameworks. For policymakers, the success of companies like Zhipu is closely tied to national priorities around economic productivity, industrial upgrading, and technological self-sufficiency.

Peers and competitive landscape

Other notable firms often grouped among the tigers include DeepSeek, which rattled global markets early last year with the release of one of its LLMs that demonstrated strong performance at relatively low cost. While DeepSeek has garnered more international attention, Zhipu has steadily expanded its footprint at home and abroad.

Zhipu gained broader recognition last year when U.S.-based OpenAI cited it as a competitor on the “front line” of China’s race to lead in AI. The reference underscored growing awareness among Western AI leaders of China’s progress in developing sophisticated models despite external constraints.

International footprint and expansion

Although primarily focused on the Chinese market, Zhipu has been quietly building an overseas presence. The company reportedly maintains offices in the UK, Singapore, Malaysia, and several countries across the Middle East. It has also established joint “innovation centers” across Southeast Asia, including projects in Indonesia and Vietnam.

These overseas initiatives highlight Zhipu’s ambition to serve emerging markets that are eager to adopt AI solutions but may face cost or regulatory barriers when working with U.S.-based providers. For investors, the international footprint offers potential growth opportunities beyond China’s highly competitive domestic market.

Geopolitical headwinds and technology constraints

Zhipu’s rise has not been without challenges. In January last year, the company was added to the U.S. Commerce Department’s Entity List after U.S. officials alleged it was working with China’s military. The designation has limited Zhipu’s access to certain U.S. technologies and suppliers.

Like many Chinese AI firms, Zhipu has also been affected by U.S. export controls restricting access to advanced semiconductors and related expertise needed to train cutting-edge models. These constraints have forced companies to optimize around less powerful hardware and invest heavily in efficiency and algorithmic innovation.

Use of proceeds and financials

According to its prospectus, Zhipu plans to allocate about 70% of the IPO proceeds to research and development for its general-purpose large AI models, underscoring its focus on technological advancement rather than near-term profitability. The remaining funds are expected to support commercialization efforts, infrastructure, and working capital.

The company reported revenue of 312.4 million yuan in 2024, reflecting growing demand for its AI products and services, though it continues to operate in a capital-intensive phase typical of foundational AI developers.

What comes next for China’s AI listings

Zhipu’s successful debut may pave the way for other Chinese AI startups to test public markets. Rival AI firm MiniMax is expected to launch its own offering on Friday (Jan. 9), following a confidential filing last year.

Together, these listings suggest that despite geopolitical tensions and regulatory uncertainty, investor appetite for China’s AI champions remains resilient. For Hong Kong, Zhipu’s IPO reinforces the city’s role as a key gateway for Chinese technology firms seeking global capital, while for China’s AI sector, it marks a symbolic step toward maturity and market validation.

Beijing authorities are considering whether to intervene in Meta Platforms’ planned acquisition of Manus, an AI start-up with roots in China.

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