OpenAI Flags Chinese Startup Zhipu AI as Rising Competitor in Global AI Race

OpenAI says China's Zhipu AI gaining ground amid Beijing's global AI push

June 25 (Reuters) - OpenAI said on Wednesday its analysts have seen notable progress by Chinese start-up Zhipu AI in securing government contracts across several regions, signaling China's growing momentum in pursuing global AI leadership. Zhipu AI, which is backed by the Chinese Communist Party, aims to "lock Chinese systems and standards into emerging markets before U.S. or European rivals can, while showcasing a 'responsible, transparent and audit-ready' Chinese AI alternative," the ChatGPT maker said in its post. The company provides AI solutions -- including sovereign large language model infrastructure and private hardware in partnership with Huawei -- to governments and state-owned enterprises in Malaysia, Singapore, the UAE, Saudi Arabia and Kenya. The initiative forms part of China's broader effort to build a self-sufficient, globally competitive AI ecosystem that rivals the United States while reducing reliance on American technology. Zhipu AI, which did not immediately respond to a request for comment, is supported by more than $1.4 billion in state investment and maintains strong ties with the Chinese government and state-owned entities, according to OpenAI. In January, the company was added to the U.S. Commerce Department's export control entity list, barring it from procuring U.S. components. Zhipu AI has been positioning itself among China's leading AI firms alongside DeepSeek, Moonshot AI, and Minimax, as well as tech giants ByteDance and Alibaba (9988.HK), opens new tab. OpenAI has also built partnerships and attracted investment across the Middle East and Asia. Its "OpenAI for Countries" initiative helps interested governments develop "sovereign AI capability" in coordination with the U.S. government. The report comes as the U.S. and China engage in intense competition in the rapidly evolving AI landscape, with both nations vying for technological dominance. Reporting by Kritika Lamba in Bengaluru; Editing by Tasim Zahid Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Blacklisted by the U.S. and backed by Beijing, this Chinese AI startup has caught OpenAI's attention

"While we hear the most about new models, just as significant is CCP headway in getting other governments around the world to adopt its AI," OpenAI said. OpenAI is putting a spotlight on an under-the-radar artificial intelligence startup that it believes is on the "front line" of China's race to lead the world in AI -- and its not DeepSeek. In a blog post on Wednesday, the company wrote that Beijing-backed Zhipu AI has made "notable progress" in the AI race, as global competition ramps up. Zhipu AI, founded in 2019, has been referred by domestic media as one of China's "AI tigers" -- a class of large language model unicorns seen as key to Beijing's efforts to rival the U.S. and reduce its dependence on American technology. While fellow "AI tiger" DeepSeek has received the lion's share of international attention after it released its R1 model in January, OpenAI suggests that Zhipu's expansion outside China and its ties to Beijing deserve more scrutiny. The startup has raised funds from several local governments, according to state media. "Zhipu AI leadership frequently engages with CCP officials, including Premier Li Qiang," OpenAI claimed, pegging the value of state-backed investments in the startup at over $1.4 billion. Zhipu AI reportedly has offices in the Middle East, the United Kingdom, Singapore and Malaysia, and is also running joint "innovation centers" projects across Southeast Asia, including in Indonesia and Vietnam. Those factors could see Zhipu AI playing a key role in China's "Digital Silk Road" strategy, as it offers AI infrastructure solutions to governments around the world. "The goal is to lock Chinese systems and standards into emerging markets before US or European rivals can, while showcasing a 'responsible, transparent and audit-ready' Chinese AI alternative," OpenAI said. Zhipu AI did not immediately respond to a request for comment on OpenAI's statements. However, last week, Zhipu AI Chairman Liu Debing told reporters that the company hoped to contribute China's AI power to the world. These aims represent a threat to OpenAI, which has received Washington's support to promote its foundational models as the world's go-to AI offering. During a visit to the UAE in May, U.S. President Donald Trump announced over $200 billion in commercial deals in the region, including one for building a Stargate UAE AI campus by OpenAI, Oracle, Nvidia and Cisco Systems. It's expected to be launched in 2026. The Stargate Project is a $500 billion AI-focused private sector investment vehicle, announced by OpenAI in January in partnership with Abu Dhabi investment firm MGX and Japan's SoftBank. This month, OpenAI was also awarded a $200 million contract to provide the U.S. Defense Department with artificial intelligence tools, and announced "OpenAI for Government," an initiative aimed at bringing its AI tools to public servants across the U.S. Zhipu is also said to be working with its domestic military, helping China's military to modernize through advanced artificial intelligence, which saw it added to the US Commerce Department's Entity List in January. The company has reportedly initiated preliminary steps toward launching an initial public offering. It has previously been valued at 20 billion yuan ($2.78 billion), according to local media reports.

Exclusive: China-backed AI firm targets new markets

Zoom in: OpenAI says its analysts have found that Zhipu is trying to make inroads in various countries in Asia and Africa. The big picture: The Trump Administration, tech leaders and others have positioned the battle over AI as the biggest of several must-win technology races, along with battles for leadership in semiconductors, quantum computing and alternative energy. Yes, but: Critics warn that the framing is leading to a downplaying of very real concerns and the race to deploy AI first raises the risk of unleashing unsafe systems.

OpenAI says China's Zhipu is gaining ground in AI race

OpenAI admits that a new Chinese competitor could dampen the American company's global ambitions. In a blog post Wednesday, OpenAI said that Zhipu AI, a billion-dollar startup backed by the Chinese government, has made "notable progress" in securing contracts with governments and state-owned firms in Southeast Asia, Africa and the Middle East -- many of the same goals that OpenAI is aiming for with its OpenAI For Countries initiative. Both companies are hoping to sell their own technology to countries aiming to build "sovereign AI." OpenAI's post says Zhipu AI's "goal is to lock Chinese systems and standards into emerging markets before U.S. or European rivals can," and that it is "positioning China's Belt and Road Initiative as the springboard for a multi-pronged 'Digital Silk Road' strategy." Which, of course, is pretty much what OpenAI is trying to do on behalf of U.S. interests. The term "sovereign AI" itself is contentious. A recent Fortune op-ed dismissed it as political branding, calling the practice "digital colonialism" resulting in a paradox. "The harder nations push for AI independence, the deeper their dependencies become" because of developing countries' reliance on chips, software and technology from geopolitical superpowers, wrote Nathan Benaich of Air Street Capital, citing OpenAI's recent Stargate UAE project. Chinese AI firm DeepSeek rattled the U.S. tech establishment earlier this year with open-source models that were as powerful as any market leader, developed at a fraction of the cost -- although it faced allegations that the models were lifted directly from OpenAI.

OpenAI says China's Zhipu AI gaining ground amid Beijing's global AI push

(Reuters) -OpenAI said on Wednesday its analysts have seen notable progress by Chinese start-up Zhipu AI in securing government contracts across several regions, signaling China's growing momentum in pursuing global AI leadership. Zhipu AI, which is backed by the Chinese Communist Party, aims to "lock Chinese systems and standards into emerging markets before U.S. or European rivals can, while showcasing a 'responsible, transparent and audit-ready' Chinese AI alternative," the ChatGPT maker said in its post. The company provides AI solutions -- including sovereign large language model infrastructure and private hardware in partnership with Huawei -- to governments and state-owned enterprises in Malaysia, Singapore, the UAE, Saudi Arabia and Kenya. The initiative forms part of China's broader effort to build a self-sufficient, globally competitive AI ecosystem that rivals the United States while reducing reliance on American technology. Zhipu AI, which did not immediately respond to a request for comment, is supported by more than $1.4 billion in state investment and maintains strong ties with the Chinese government and state-owned entities, according to OpenAI. In January, the company was added to the U.S. Commerce Department's export control entity list, barring it from procuring U.S. components. Zhipu AI has been positioning itself among China's leading AI firms alongside DeepSeek, Moonshot AI, and Minimax, as well as tech giants ByteDance and Alibaba. OpenAI has also built partnerships and attracted investment across the Middle East and Asia. Its "OpenAI for Countries" initiative helps interested governments develop "sovereign AI capability" in coordination with the U.S. government. The report comes as the U.S. and China engage in intense competition in the rapidly evolving AI landscape, with both nations vying for technological dominance. (Reporting by Kritika Lamba in Bengaluru; Editing by Tasim Zahid)