China's Zhipu AI revenue quintuples in first half, loss narrows

China's Z.AI (2513) posted a net loss of 2 billion yuan (HK$2.33 billion) for the six months ended June 30, compared with a loss of 2.4 billion yuan a year earlier, while reporting a 36.6 percent rise in research and development spending to 2.1 billion yuan.

The first large language model developer to list in Hong Kong reported first-half revenue of 953.9 million yuan, up 400 percent from a year earlier, as the Beijing-based startup sought to turn demand for its AI models into sales while rolling out lower-cost products and expanding use of domestic chips.

The company faces intensifying competition in China's AI sector, with rivals, including Alibaba (9988), ByteDance and startups, such as Moonshot, cutting prices and racing to launch new models.

Rival MiniMax (0100), which listed in Hong Kong in January, reported last week a 283 percent jump in first-half revenue to US$116.6 million (HK$909.48 million) while its adjusted net loss more than doubled.

Revenues of Zhipu and MiniMax remain a fraction of those reported by US labs, underscoring the challenge Chinese startups face in monetising AI even as their open-source models gain global adoption.

Anthropic's annual revenue run rate topped US$65 billion by the end of July, while OpenAI exceeded US$25 billion in annualized revenue earlier this year.

Zhipu has sought to differentiate itself through coding and cybersecurity-focused models. It said its flagship GLM-5.3 matched Anthropic's Mythos 5 on some white-box code-review and vulnerability-discovery tests, though it lagged on more complex vulnerability-exploitation tasks.

In June, Zhipu's market capitalisation briefly topped HK$1 trillion, a first for a Chinese AI model firm, after the release of its GLM-5.2 model, though the stock has since shed nearly half of its value.

This month, Zhipu released lower-cost GLM-5.3-Flash, which it said was tested entirely with the use of Chinese-made chips, as it accelerated a pivot away from imports amid tighter US export controls on advanced chips.

Analysts expect full-year revenue to reach 5 billion yuan in 2026 and the firm to post an adjusted profit by 2028, according to a J.P. Morgan research note.

Reuters and staff reporter

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