China's Zhipu AI Shares Surge on $4.0 Billion Fundraising — Update

By Tracy Qu and P.R. Venkat

Shares of Zhipu AI rose sharply after the Chinese artificial-intelligence company announced plans for a US$4 billion fundraising to support growth, despite pricing the new shares at a discount.

The stock surged as much as 22% in early Thursday trading, before paring the gains. The stock recently traded 9% higher at 1,989.00 Hong Kong dollars, equivalent to US$253.72, outperforming the benchmark Hang Seng Tech Index's 0.1% decline.

The Beijing-based company is offering 19.78 million shares at HK$1,588 each. The placement price is a near 13% discount to the stock's Wednesday closing price of HK$1,825 a share.

Zhipu AI's fundraising comes as AI companies ramp up spending on computing infrastructure and large-language-model development. Chinese AI companies have been raising billions of dollars to compete with global players such as OpenAI, Anthropic and Google as businesses race to leverage generative AI to automate tasks and boost productivity.

Last month, DeepSeek raised more than US$7.4 billion in its first funding round to support business expansion. That deal valued the Chinese firm at more than US$50 billion, according to people familiar with the matter.

Zhipu AI is also competing with rivals at home, including DeepSeek, Moonshot AI and MiniMax, that are heavily investing in large language models. Last month, Zhipu launched the GLM-5.2 model, its most powerful large language model to date.

"The continued advancement in model capabilities and the large-scale commercialization of AI applications have placed higher demands on the company's capital strength and funding reserves," Zhipu said.

Zhipu's share price has rallied since its listing in January, pushing its market capitalization to more than US$100 billion.

Proceeds from the private placement will be used for research and development, cloud computing services, business expansion and potential mergers and acquisitions.

Zhipu expects to fully deploy the proceeds by the end of next year.

CICC is acting as the placing agent for the transaction.

Zhipu's first lock-up period following its listing expired earlier this week. The lock-up period is a contractual restriction that prohibits investors from selling their shares for a certain period of time after an IPO. Expiration of that period could potentially create more liquidity in shares if investors sell their shares.

Morgan Stanley said in a recent report that Hong Kong faces a "meaningful amount of share unlocking and potential secondary selling" in July and September. "These events can create liquidity headwinds even when fundamentals remain intact," it said.

Write to Tracy Qu at tracy.qu@wsj.com and P.R. Venkat at venkat.pr@wsj.com

(END) Dow Jones Newswires

July 09, 2026 01:09 ET (05:09 GMT)