A new Chinese AI challenger to U.S. tech giants such as Nvidia (NVDA) and Microsoft (MSFT) is set to turbocharge its growth through an IPO.
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Zhipu Could be Another DeepSeek
Chinese startup Zhipu AI, which has a similar business model to that of compatriot DeepSeek, is reportedly gearing up for a domestic listing sometime next year. Founded in 2019, the Chinese AI tiger has been the beneficiary of major Chinese government funding and secured backing from investors such as tech stars Alibaba (BABA) and Tencent (TCEHY).
Zhipu AI develops the GLM series of language models and claims that its flagship GLM4 model outperforms OpenAI’s GPT-4 on several performance benchmarks.
It announced this week that it is going to open-source its GLM models and that its GLM-Z1-32B-0414 model matches the performance of rival product DeepSeek-R1 at one-thirtieth of the operational cost.
DeepSeek, of course, rattled the Magnificent Seven tech stocks such as Nvidia, Microsoft, Alphabet (GOOGL) and Meta Platforms (META) in the U.S. earlier this year with its own low-cost but just as effective rival technology.
AI Race Heats Up
Zhipu AI could therefore be an even sterner challenge, although one barrier could be the decision of the U.S. Bureau of Industry and Security’s Commerce Department in January to add the company and its subsidiaries to its restricted trade list. However, Zhipu said this would not substantially impact its business.
A Zhipu AI listing could also fire the starting pistol for other Chinese AI startups to go public. That is significant because AI is an increasingly competitive space between the U.S. and China. It has been given even greater momentum in the last few months as relations between the two largest economies in the world sour over tariff hikes.
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