Chinese artificial intelligence company Knowledge Atlas Technology JSC, better known as Zhipu AI, is seeking to raise around $4 billion through a share placement in Hong Kong.
The share sale comes after its stock surged following its market debut earlier this year.
The fundraising comes as investor interest in Chinese AI companies remains strong and technology firms increasingly tap Hong Kong’s capital markets to finance research, hiring and expansion amid China’s push to narrow the artificial intelligence gap with the United States.
Zhipu launches $4 billion share placement
According to a term sheet seen by Reuters, Zhipu is offering 19.78 million new shares at HK$1,588 to HK$1,698 each. The offer represents a 7% to 13% discount to Wednesday’s closing price of HK$1,825.
The accelerated bookbuild, a rapid share sale typically targeted at institutional investors, would increase the company’s share capital by about 4.2%, according to the term sheet.
The deal follows another strong trading session for the stock. Zhipu shares climbed 13.4% on Wednesday, extending gains in one of Hong Kong’s hottest AI stocks.
The company’s shares have surged nearly 1,500% since its January listing in Hong Kong.
The company 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.
Bloomberg reported that the company intends to optimize its capital structure.
China International Capital Corp. is acting as the sole overall coordinator for the offering.
AI investment boom fuels fundraising
Chinese technology companies have increasingly turned to Hong Kong’s equity markets to fund AI development as competition with US technology companies intensifies.
This week alone, several technology firms advanced Hong Kong fundraising plans.
Nexchip Semiconductor priced an initial public offering expected to raise about HK$6.98 billion ($890 million).
Separately, Shanghai Iluvatar CoreX Semiconductor Co. is seeking to raise about $850 million through a Hong Kong share sale, while Shanghai Biren Technology Co. recently raised about $900 million through a share placement.
Investor appetite for Chinese AI companies remains robust, although valuation concerns have made buyers more selective.
“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,” said Glenn Yin, research director at brokerage ACCM in the Reuters report.
Regulatory scrutiny and AI expansion
Zhipu is one of China’s best-known AI model developers and is viewed by investors as a fast-rising Chinese challenger to US companies such as OpenAI, supported by strong demand for large language models.
The fundraising comes as Chinese authorities consider tighter oversight of advanced domestic AI technology.
Reuters reported that officials recently met with leading technology companies, including Zhipu, to discuss potentially restricting overseas access to China’s most advanced AI models.
Earlier this year, Zhipu raised HK$4.35 billion in its Hong Kong initial public offering.
The company also said last month that it plans to raise 15 billion yuan through a proposed listing on Shanghai’s STAR Market.
The company recently launched its GLM-5.2 AI model and is making the technology free and open for developers to build upon, aiming to expand adoption of its platform globally.
The latest fundraising also comes as China’s AI sector continues to evolve rapidly.
Reuters reported that AI startup MiniMax is developing a large language model with 2.7 trillion parameters, while news that DeepSeek is developing its own AI chip weighed on sentiment toward US semiconductor stocks earlier this week.
