4 key takeaways: Zhipu becomes first Chinese AI firm to go public, warns of global price war

As China's first AI software maker to list publicly, Beijing-based Zhipu AI made waves on January 8, 2026, with its Hong Kong IPO and a bold prediction about the future of global AI competition. Here's what you need to know:

1. Zhipu becomes world's 'first large model IPO' with a strong market debut

Zhipu AI officially listed on the Hong Kong Stock Exchange, claiming the title of the world's first public company focused on general artificial intelligence (AGI) foundation models.

The IPO raised over HK$4.3 billion (about $558 million) at an issue price of HK$116.2 per share. On its first day of trading, the stock opened at HK$120, surged as high as HK$130 (an 11.88 percent gain) and reached a market value of over HK$57 billion.

Investor demand was robust: Hong Kong's public offering was oversubscribed 1,159 times, while the international offering saw 15.28 times oversubscription. Eleven cornerstone investors – including Beijing's core state-owned capital, top insurance funds, and major public funds – jointly subscribed to HK$2.98 billion worth of shares, accounting for 70 percent of the offering.

2. Zhipu's 'low-price strategy' is a global competitive weapon

The company is doubling down on affordable AI services, a move it says will trigger a global AI price war.

Its AI coding tool costs as little as 20 yuan (less than $3) per month – roughly one-seventh the price of Anthropic's Claude, a key U.S. rival. By late 2025, this low-cost offering had attracted 150,000 paying developers across 184 countries and hit over 100 million yuan ($13.9 million) in annual recurring revenue (ARR).

Zhipu's chairman, Liu Debing, told Bloomberg TV, "The Chinese market's hyper-competition has already pushed prices down. As we expand globally, international users will recognize this value. A price point one-seventh of rivals gives us a clear advantage the world can't ignore." He predicts U.S. AI firms will eventually be forced into the same profit-sacrificing price competition that Chinese players face.

3. MaaS is the core business, but losses persist amid heavy R&D

Zhipu's business centers on "Model as a Service (MaaS)," a scalable model for selling AI capabilities, but it still faces steep losses due to research and development (R&D) costs.

MaaS growth: Its MaaS platform (offering API calls, subscriptions and localized deployment) has 2.9 million users (15 percent paying) and serves 12,000 enterprise clients globally, including 50 percent of China's top 10 internet firms. In H1 2025, MaaS drove revenue to 190.9 million yuan ($27 million), a 325 percent year-on-year jump.

Financial challenges: Despite revenue growth, Zhipu reported a net loss of 2.36 billion yuan ($330 million) in H1 2025, with R&D spending hitting 1.59 billion yuan ($228 million) – eight times its revenue for the period. Liu said profitability is not a priority; the focus is on advancing AGI, and the company has 2.55 billion yuan ($358 million) in cash to sustain expansion.

4. Global expansion: From Southeast Asia to 'sovereign AI' partnerships

Zhipu is pushing beyond China, with a focus on Southeast Asia and building "sovereign AI" infrastructure for partner countries.

Regional footprint: By H1 2025, overseas revenue accounted for 11.6 percent of its total, with 11.1 percent (17.9 million yuan, or $2.5 million) coming from Southeast Asia – up from just 0.5 percent of localized deployment revenue in 2024.

Sovereign AI push: It leads the "International Alliance for Independent Large Model Co-construction," partnering with 10 ASEAN countries and 10 Belt and Road nations to build controlled national AI infrastructure. This makes it a key player in "sovereign AI competition" – a status recognized by OpenAI, which named Zhipu a major rival in its 2025 report Chinese Progress at the Front.

(Cover via VCG)