Zhipu AI raises $4 billion in Hong Kong share sale as stock surges 14.7% amid AI spending race

China's Zhipu AI launches $4 billion Hong Kong share sale as stock surges

July 8 (Reuters) - Knowledge Atlas Technology JSC (2513.HK), opens new tab, known as Zhipu AI, is seeking to raise around $4 billion via a share sale in Hong Kong, according to a term sheet seen by Reuters on Wednesday. The deal came after Zhipu's shares surged 13.4% on Wednesday, extending strong gains in one of Hong Kong's hottest artificial intelligence stocks. Zhipu is offering 19.78 million new shares at HK$1,588 to HK$1,698 each, representing a 7% to 13% discount to Wednesday's close of HK$1,825. The accelerated bookbuild, a rapid share sale typically aimed at institutional investors, would increase the company's share capital by about 4.2%, ⁠according to the term sheet. Chinese technology companies are turning to Hong Kong's capital markets to fund research, hiring and expansion as China seeks to narrow the gap with the U.S. in artificial intelligence. This week alone, several technology firms moved ahead with Hong Kong listings, including Nexchip Semiconductor, which priced an IPO to raise about HK$6.98 billion ($890 million). Investor demand for Chinese AI companies remains strong, although concerns about valuations have made buyers more selective, said Glenn Yin, research director at brokerage ACCM. "Raising $4 billion gives Zhipu significant firepower to compete, but it also increases pressure on the company to demonstrate that heavy AI investment can translate into sustainable commercial returns," he added. Zhipu plans to use the proceeds for research and development, including hiring, computing capacity and technical services, ⁠as well as business expansion, strategic investments, mergers and acquisitions, working capital and general corporate purposes. CHALLENGER TO THE U.S. Zhipu is one of China's best-known AI model developers and is viewed by investors as a fast-rising Chinese challenger to U.S. firms such as OpenAI, helped by strong demand for large language models. The fundraising also comes as Beijing considers tighter control over its most advanced AI technology. Reuters reported on Tuesday ⁠that Chinese authorities had held meetings with top technology firms, including Zhipu, about possibly limiting overseas access to China's leading AI models, according to people familiar with the matter. Any such curbs could affect how Chinese AI companies sell or offer their models abroad, although Reuters could not ⁠determine how the restrictions would work. Zhipu raised HK$4.35 billion in its Hong Kong initial public offering at the start of the year. It said last month it aimed to raise 15 billion yuan from a planned STAR Market listing in Shanghai. Meanwhile AI startup ⁠MiniMax (0100.HK), opens new tab is working on a large language model with 2.7 trillion parameters, Reuters reported earlier on Wednesday. On Tuesday, the news of DeepSeek developing its own AI chip hurt sentiment towards U.S. chip stocks. ($1 = 6.7995 Chinese yuan renminbi) ($1 = 7.8395 Hong Kong dollars) Reporting by Nichiket Sunil and Rajasik Mukherjee in Bengaluru and Yantoultra Ngui in Singapore; Editing by Joyjeet Das and Louise Heavens Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Asia Pacific Yantoultra Ngui Thomson Reuters Yantoultra Ngui is the Southeast Asia Deals Correspondent of Reuters in Singapore, covering M&A and capital market activities in a region that is fast emerging as one of the world's biggest economies. He previously was a reporter at Bloomberg and The Wall Street Journal (WSJ). Notably, he was part of WSJ's team that covered the financial scandal at Malaysian state fund 1MDB, and that won SOPA Excellence in Breaking News award for the coverage of the assassination of Kim Jong Nam, the half-brother of North Korea's leader Kim Jong Un, in Malaysia in 2018. Yantoultra graduated with an MBA in Finance from Universiti Putra Malaysia (UPM) in 2010.

Why is Zhipu AI stock surging today? By Investing.com

Investing.com -- Zhipu AI, trading as Knowledge Atlas Tech Joint Stock, surged 14.7% to HK$2,094 on Thursday after the company completed a massive secondary share sale to raise about $4 billion. Zhipu raised approximately HK$31.4 billion by pricing 19.78 million shares at HK$1,588 each -- a roughly 13% discount to its prior close. The proceeds are earmarked to strengthen the company's capital base and fund continued research and development of its foundation large language models, marking a significant step in its post-IPO growth strategy. The placement comes on the heels of a pivotal lock-up expiry event on July 8, which many market participants had feared would unleash heavy selling pressure. Instead, a coalition of major cornerstone investors -- including state-backed capital and government-linked industrial funds representing close to 70% of the unlocked cornerstone shares -- publicly reaffirmed their long-term commitment to the stock, effectively neutralizing the anticipated overhang. Adding further momentum, reports earlier this week indicated Zhipu is exploring custom ASIC chip development to power its GLM model family, underscoring its ambitions to reduce reliance on third-party AI hardware. The broader Hong Kong technology market provided a supportive backdrop, with the Hang Seng Tech Index having surged sharply this week, fueled by a concentrated wave of AI announcements from Chinese internet giants and a rotation of capital into software and large-model names. Zhipu is one of the hottest stocks in the Hong Kong market, having surged nearly 1300% since its January debut as investors largely cheered the company's prospects in the AI industry. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

China's Zhipu AI Plans to Raise $4.0 Billion as Tech Spending Accelerates

Chinese artificial-intelligence company Knowledge Atlas Technology plans to raise US$4.0 billion through a private placement of shares as AI companies ramp up spending on computing infrastructure and large-language-model development. The Beijing-based company, which also operates under the name Zhipu AI, said Thursday that it would offer 19.78 million shares at 1,588 Hong Kong dollars, equivalent to US$202.57 each. The placement price is at a 12.99% discount to the stock's Wednesday closing price of HK$1,825. 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. The company is also competing with domestic rivals, including DeepSeek, Moonshot AI and MiniMax, in China's rapidly expanding market for large language models. 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 $50 billion, according to people familiar with the matter. "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," Knowledge Atlas Technology said. Proceeds from the private placement will be used for research & development, cloud computing services, business expansion and potential mergers and acquisitions. The company expects to fully deploy the proceeds by the end of next year. CICC is acting as the placing agent for the transaction.