Z.ai's GLM-5.2 narrows frontier gap with Anthropic as Chinese AI models gain traction globally

After Anthropic shutdown, China's Z.ai closes frontier gap as it plans dual listing

BEIJING, June 25 (Reuters) - Chinese AI startup Z.ai (2513.HK), opens new tab said on Thursday it plans to use domestic listing proceeds to fund a quest for artificial general intelligence, after its latest model scored close to leading U.S. models from Anthropic and OpenAI on public benchmarks. Z.ai's flagship GLM-5.2 model, released a day after Anthropic disabled worldwide access to its most advanced models, stunned global users after its performance benchmarks narrowly trailed leading closed-source models. "Our mission is to obtain AGI, so right now our focus is how to improve our model to achieve the upper bound of intelligence. So all these resources are helping us," said Qinkai Zheng, technical lead of the firm's CodeGeeX team. The accompanying surge in investor interest sent shares rallying more than 2,000% from their blockbuster Hong Kong debut in January, to cross a threshold of HK$1 trillion ($128 billion) in market capitalisation this week. "This model is comparable to the top closed models," Zheng told reporters at its head ⁠office in Beijing. "It's the first time that an open-source model really delivers very solid coding and agent performance that can compare with the leading proprietary AI companies like Anthropic and OpenAI." GLM-5.2 now holds fourth place on Artificial Analysis' LLM intelligence leaderboard and the second spot on Code Arena's front-end coding leaderboard, operating at roughly a sixth of the cost of closed U.S. frontier models. The sudden "unplugging" of closed U.S. frontier models has unleashed severe anxiety among global allies such as Canada and France, whose leaders heavily criticised over-reliance on U.S.-controlled AI infrastructure at a G7 summit last week. For the first time a Chinese open-source AI model has come close to bridging the frontier gap with heavily-funded Western AI labs, after previously surpassing U.S. open-source models such as Google's Gemma and Meta's Llama series despite constraints on computing power. Analysts previously estimated that the performance capabilities of top Chinese AI models were four to six months behind leading U.S. models. Z.ai, also known as Zhipu AI, said this month it plans a dual listing in the ⁠commercial hub Shanghai but did not disclose how much it aimed to raise. SPECIALISING IN CODING, COMPLEX TASKS Specialising in coding and complex long-horizon tasks, the model has 750 billion total parameters and a massive 1-million token context window. It was released with inference adaptation to a wide variety of domestic chip infrastructure users, including Huawei Ascend clusters, the company said in a blog post. Since February, Z.ai's GLM-5 series has been adapted to run on domestic semiconductors after the U.S. tightened China's access to advanced Nvidia chips. "We are trying our best to improve our infrastructure and to ⁠make the model more efficient on different kinds of chips," said Zheng, without disclosing whether it was trained on domestic or foreign chips. Despite fierce domestic price competition, Z.ai has successfully hiked prices for its frontier models multiple times this year, reflecting its strong enterprise adoption in China, where it is also widely used in public sector procurement. In a post on X, co-founder Tang ⁠Jie emphasised Z.ai's commitment to open-source and described the abrupt pulling of Anthropic's Fable and Mythos models as "deeply regrettable". JP Morgan projected the firm's revenue to balloon by this year and for it to turn profitable in 2028 - but Z.ai only earns a fraction of the revenue of its U.S. counterparts, stock exchange filings show. "We are trying to ⁠lower the cost, but because the demand is too large, maybe in the future we will still need to increase the price," said Zheng. "But we want the model accessible to everyone." Zheng said that the company would target long-horizon tasks and self-evolving autonomous agent systems in future models. Its next GLM-5.5 model is expected to be released in August and could become the next key milestone in Chinese frontier AI. ($1=7.8397 Hong Kong dollars) Reporting by Laurie Chen; Editing by Clarence Fernandez Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Disrupted Laurie Chen Thomson Reuters Laurie Chen is a China Correspondent at Reuters in Beijing, whose coverage focuses on the nexus of frontier technology, strategic emerging industries and geopolitics. She has reported on China for almost a decade, having previously covered China's government, defence, security and foreign policy. She has broken multiple global scoops on U.S.-China relations and the trade war 2.0, elite Chinese politics and diplomacy. She is particularly interested in Chinese frontier AI, tech and industrial policy, semiconductor supply chains, robotics, aerospace and grand strategy.

Chinese A.I. Models Gain Ground on Anthropic and OpenAI

Cade Metz reported from San Francisco, Karen Weise from Seattle and Meaghan Tobin from Taipei, Taiwan. Two weeks ago, the artificial intelligence company Anthropic shut down its two most powerful A.I. systems after an unexpected demand from the U.S. government to cut access to it. Days later, a Chinese start-up, Z.ai, released an A.I. model that is nearly as powerful as Anthropic's models, Fable and Mythos. But Z.ai's new technology costs much less to use, and no one in the United States was putting restrictions on it. It quickly landed on a closely watched leaderboard of the world's 10 most popular models. Z.ai is on the cutting edge of a wave of powerful but inexpensive A.I. from China that is challenging the lock that OpenAI, Anthropic and Google have had on the industry. Six of the models now on the A.I. leaderboard were developed in China. Z.ai's new model, GLM-5.2, arrived just as U.S. businesses realized that they had to find ways to cut down on how much they were spending on A.I. It also landed when executives in Silicon Valley were becoming worried that the Trump administration was leaning toward regulating the technology. "With Fable restricted, the gap between the U.S. and China is very slim," said Rehaan Ahmad, a co-founder of the Silicon Valley start-up alphaXiv, who has been using Z.ai's new model for more than a week. The Chinese models still face two big hurdles to widespread use in the United States: concerns about their ties to the Chinese government and complaints that Chinese companies have unfairly used American technology to build these cheaper models. But their low cost is winning converts. About 18 months ago, the Chinese start-up DeepSeek shocked Silicon Valley when it demonstrated that it could build effective A.I. far more affordably than many of its American counterparts. Z.ai is doing something similar. When performing certain tasks, GLM-5.2 costs about an eighth as much as Anthropic's Claude Opus 4.8, which came out shortly before Fable and Mythos, according to OpenRouter, a start-up that runs the A.I. leaderboard. Like most top-performing Chinese models, GLM-5.2 is open source software, which means anyone can use and modify it for free. That makes it much cheaper to use, even if it is not quite as powerful as what American companies have created. "Do you need to drive a Ferrari everywhere?" asked Vivek Ramaswami, a start-up investor at Madrona Venture Group. "Probably not." Z.ai did not respond to requests for comment. GLM-5.2 is particularly good at generating computer code and powering A.I. agents, digital assistants that can use other software to perform tasks. Z.ai's technology is now the third most widely used in the world for A.I. tasks, said Anastasios Angelopoulos, chief executive of ArenaAI, which tracks millions of A.I. users. The largest cloud computing providers, including Microsoft and Amazon, already offer access to some systems from Z.ai, DeepSeek, MiniMax and other Chinese start-ups. Microsoft has also considered adding the latest DeepSeek model as an option to power one of its own products, which now runs on technology from Anthropic and OpenAI, two people familiar with the deliberations said, speaking on the condition of anonymity because they were not authorized to discuss them publicly. The talks were reported earlier by Axios. Microsoft, Anthropic and OpenAI declined to comment. Some software developers are reluctant to use the A.I. system that Z.ai offers from computers in China, because they worry about sharing data with the company or with the Chinese government. They are also wary of China's efforts to censor its A.I. systems or running afoul of U.S. export restrictions. Z.ai was added to the Commerce Department's trade blacklist in 2025. Corporate filings show that several of the company's shareholders are controlled by a Chinese government agency that supervises the country's defense industry. Companies can still use the model without sending data back to China in violation of U.S. export rules, as long as they are careful about how they set up their systems, said Wei Chen, chief legal officer at Infoblox, a network security company. "The Chinese models do not have the same restrictions if you host them yourself or you go through another provider," Mr. Ahmad of alphaXiv said. "Right now, there are more restrictions on models from Anthropic." After DeepSeek's release in 2025, governments around the world passed regulations limiting its use because of data security concerns. But so far, GLM-5.2 has not raised similar alarms, Ms. Chen said. Anthropic and OpenAI have accused Chinese companies of improperly harvesting data from their A.I. systems to accelerate the development of the Chinese technology. On Wednesday, Anthropic sent a letter, viewed by The New York Times, to Senators Tim Scott, Republican of South Carolina, and Elizabeth Warren, Democrat of Massachusetts, accusing the Chinese tech giant Alibaba of "brazenly" and "illicitly" trying to copy its technology through 24,000 fraudulent accounts. Alibaba declined to comment. When Mustafa Suleyman, the head of Microsoft's A.I. lab, unveiled a suite of new models this month, he emphasized that they had been built from scratch on data that the company had commercially licensed. "That means that you can put it into production in a very trustworthy way with complete confidence," he said. (The Times has sued OpenAI and its partner, Microsoft, accusing them of copyright infringement of news content related to A.I. systems. They have denied those claims.) Using data from one system to train another -- a process called distillation -- is common in A.I. development. But the Anthropic and OpenAI terms of service forbid anyone to surreptitiously harvest data for distillation. It is not clear whether Z.ai used distillation in the development of its technology. But distillation alone cannot build a top A.I. system. That requires several other complex techniques as well, said Charles O'Neill, head of model training at Baseten, a company that sells access to GLM-5.2. "This narrative that all of the capabilities of these models are coming from Anthropic is not as true as people say it is," Mr. O'Neill said. Chinese A.I. start-ups can offer their models as an open-source technology at far lower prices in part because the industry has benefited from years of support from the Chinese government, which views A.I. as a critical engine of economic growth. Many executives have said U.S. companies should not open-source their technology because it could be used in harmful situations. But other experts argue that if regulators stifle open-source technology in the United States, China will gain a significant edge. Because China produces most of the top-performing open-source systems, they say, U.S. developers will build their software atop those technologies. In the long run, that could put China at the heart of A.I. development. Some argue that Chinese systems will always trail the top U.S. models because U.S. export controls limit the flow of the specialized computer chips needed to train A.I. technologies. Z.ai and other Chinese start-ups spend millions for access to chips in data centers outside China. Z.ai's filings in Hong Kong show that in the first half of 2025, the company spent more than seven times its revenue on expenses that essentially boiled down to fees for such computing services. Still, experts estimate that China is just six months or less behind the American companies. "There had been this speculation that the export controls would eventually bite and the gap would widen between American frontier models and their Chinese models, but GLM is pushing things in the other direction," said Jeffrey Ding, an assistant professor at George Washington University who specializes in emerging technology and international relations. And with Fable and Mythos sidelined, many businesses have realized the importance of having alternatives. "There is a bit of apprehension at large organizations about loyalty," said Justin Summerville, who runs data analytics at OpenRouter. "Who knows what the top model will be in three weeks?"