Z.AI Shares Slump on Competitor's Model Release, Broader Tech Decline

By Tracy Qu

Chinese artificial-intelligence company Z.AI's shares slumped after a key competitor released a powerful new large language model, compounded by a broader tech-sector decline.

Shares of Z.AI, previously known as Zhipu AI, slid 24% to 1,168.00 Hong Kong dollars, equivalent to US$148.98, in Friday afternoon trading. The Hang Seng Tech Index was last down 4.1%.

Domestic rival Moonshot AI launched Kimi K3, saying it outperforms some cutting-edge U.S. systems, as well as Z.AI's GLM 5.2.

Shares of MiniMax, another Chinese AI company, also slid in Hong Kong trading, down 18%.

Morningstar senior equity analyst Chelsey Tam said the release of Kimi K3 likely contributed to Z.AI and MiniMax's declines. This reflects "the intense competition in the large language model space, where new models are constantly leapfrogging one another," Tam said.

"K3 raises the capability ceiling for China AI models, shifting the burden of proof to other independent AI labs, e.g. Zhipu and MiniMax," BofA Securities said in a research note.

DBS said in a note that it is cautious on Z.AI's relatively high valuation, which likely prices in its position as the "best Chinese model player." However, DBS noted that K3 has overtaken Z.AI's GLM 5.2 model across major benchmarks.

Chinese AI companies are catching up quickly with U.S. leaders in terms of model capabilities, but revenue and valuations generated remain a fraction of companies such as OpenAI and Anthropic.

Write to Tracy Qu at tracy.qu@wsj.com

(END) Dow Jones Newswires

July 17, 2026 04:05 ET (08:05 GMT)