Shares of Zhipu AI surged on Wednesday after the company reported robust revenue growth in its first earnings release since going public, underscoring investor enthusiasm for China’s fast-evolving artificial intelligence sector despite ongoing losses.
The Beijing-based firm, formally known as Knowledge Atlas Technology, rose as much as 35% in early trading before trimming gains to around 30% by the afternoon.
The stock has drawn significant attention since its Hong Kong debut in January, when it raised about $558 million in one of the first listings by a pure-play AI model developer.
Revenue growth outpaces expectations despite miss
Zhipu reported that revenue climbed 132% year-on-year to 724 million yuan in 2025, reflecting strong demand for its AI models and related services.
However, the figure came in slightly below analyst expectations of 760 million yuan, according to a Reuters poll.
The company posted an adjusted net loss of 3.18 billion yuan, widening 29.1% from the previous year, as it ramped up spending on research and development to compete in the rapidly evolving AI landscape.
Founded in 2019 by researchers from Tsinghua University, Zhipu has positioned itself as one of China’s leading AI startups.
It is often grouped among the country’s “AI tigers,” a cohort aiming to rival global leaders such as OpenAI and Anthropic.
Model upgrades intensify competition
The company recently launched its GLM-5 model, which it said delivers competitive performance on several benchmarks.
According to Zhipu, the model approaches the capabilities of Anthropic’s Claude Opus 4.5 in coding tasks and outperforms Google’s Gemini 3 Pro on certain metrics.
The open-source release, introduced in February, includes enhanced coding capabilities and supports long-running agent-based tasks, highlighting the rapid pace of innovation among Chinese AI firms.
Competition in the domestic market has intensified as companies race to roll out more advanced models and expand their user base.
Zhipu competes with startups such as MiniMax, Moonshot AI and DeepSeek, as well as major technology groups including ByteDance and Alibaba.
Domestic chips and policy support in focus
Chief executive Zhang Peng said the company is accelerating the use of domestic semiconductors to meet surging computing demand, reflecting Beijing’s broader push to build a self-reliant chip ecosystem.
The shift is particularly significant given that Zhipu has faced constraints due to US export restrictions, which have limited access to advanced chips and related technologies.
The company was also added to the US Commerce Department’s Entity List last year, restricting its ability to source certain components.
Despite these challenges, Zhipu continues to benefit from strong domestic support and remains a key barometer of China’s AI ambitions.
Global expansion plans gather pace
While China remains its primary market, Zhipu has begun expanding overseas, particularly in Southeast Asia.
The company said international revenue is gaining traction, although it has yet to directly compete with US firms in consumer-facing subscription markets.
The broader sector is also seeing strong investor interest.
Shares of rival MiniMax, which was also listed in Hong Kong earlier this year, rose about 16% on Wednesday, even as it reported significant losses.
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