Chinese AI Startups Go Public in Key Test for the Sector

Two leading Chinese artificial intelligence startups are entering public markets this week, offering an early gauge of investor confidence in the country’s fast-growing AI industry.

Zhipu AI made its Hong Kong debut on Thursday, with rival MiniMax set to follow a day later. Zhipu’s shares jumped more than 12% after its heavily oversubscribed initial public offering raised HK$4.35 billion ($558 million), signaling strong market appetite for Chinese generative AI firms.

The listings come ahead of any IPO moves by major US players such as OpenAI, the company behind ChatGPT, and Anthropic, creator of the Claude chatbot. However, analysts caution that profitability remains a distant goal. Zhipu and MiniMax are the first two public offerings among China’s so-called “six tigers” a group of generative AI startups competing with tech giants like Alibaba and ByteDance.

“Zhipu is honoured to stand at this historic moment as a representative of China’s large-model sector,” chairman Liu Debing said at the company’s listing ceremony.

Founded in 2019, Zhipu AI is a major provider of large language model (LLM) services for enterprise and government clients in China. The company said IPO proceeds will be used to develop general-purpose AI models, including core algorithms and system infrastructure.

MiniMax, established in 2022, takes a more consumer-focused approach, targeting users both inside and outside China with generative AI tools for text, speech, music, and video.

Liu told Bloomberg Television that as competition intensifies, the market will gradually reach a balance in terms of performance, pricing, and user understanding. He also noted that computing costs for AI development are beginning to trend downward.

According to China tech analyst Poe Zhao, founder of the Hello China Tech newsletter, the twin IPOs highlight both the promise and the pressure facing China’s new wave of LLM companies.

“Strong demand reflects broader optimism around Chinese AI,” Zhao said, while noting that the sector remains capital-intensive and highly competitive.

The AI boom has helped propel tech stocks to record highs in recent months, though volatility persists as global investors watch closely for signs of overheating. “Is there a bubble? Yes,” Zhao said. “But there’s a difference between a bubble and bubble risk. These companies require massive capital investment.”

China’s LLM market is projected to reach 101.1 billion yuan ($14.5 billion) by 2030, according to Frost & Sullivan. Momentum in the sector accelerated in January 2025 when startup DeepSeek unveiled a low-cost, high-performance reasoning model that challenged assumptions about US dominance in AI.

Zhipu, which counts Tencent among its backers, was placed on a US export control blacklist last year over national security concerns. Meanwhile, MiniMax is facing copyright lawsuits from Disney and other US entertainment companies, including Universal.

Despite investor enthusiasm, Zhao does not expect either company to turn a profit soon. “That will depend on two major shifts: much lower computing costs and far greater AI demand to spread those costs,” he said.

Beijing has reportedly encouraged tech firms to adopt domestically produced chips amid US restrictions on advanced Nvidia processors used in AI training. Confidence in China’s semiconductor ambitions recently drove sharp gains in shares of chipmakers Moore Threads and MetaX following their market debuts.

Earlier this month, Baidu announced that its AI chip unit, Kunlunxin, had filed for a Hong Kong listing.

For chatbot developers, the outlook remains complex, said Shengyun Lu, founder of LSY Consulting. “Building a foundational model company takes enormous time and capital,” he said. “IPOs provide funding for future research, but they also give early investors a chance to exit.”