Zhipu's share sale: China's AI sensation secures billions.

      A remarkable 2,000% surge has opened a unique fundraising opportunity for Beijing's Zhipu, especially following the disappearance of Anthropic's Fable 5. The more challenging question remains whether a lab that is deeply unprofitable can transform this moment into a sustainable business.

      Six months ago, Zhipu was a Chinese artificial intelligence lab that had just completed a $558 million listing in Hong Kong, with shares initially priced at HK$116.2. This week, those shares soared to HK$2,980.

      This marks an approximate increase of 2,000% since January, elevating the company, now known as Knowledge Atlas Technology, to a market valuation exceeding HK$1 trillion, approximately $128 billion.

      Now, Zhipu is looking to capitalize on this moment. According to sources familiar with the situation, the company is contemplating a share sale in Hong Kong to raise several billion US dollars. This placement could happen next month, coinciding with the expiration of a six-month lock-up period from the IPO on July 8. Zhipu also plans to issue shares in Shanghai, with a deal of this magnitude expected to far surpass the original listing.

      On Wednesday, the shares rose by as much as 16% but eased back after the Bloomberg report, closing at HK$2,174.

      The immediate interpretation is that a hot stock is doing what such stocks do, taking advantage of favorable conditions. The more intriguing aspect is what this rally signifies in terms of pricing. Investors are not merely wagering on a Chinese AI lab; they are also betting on a geopolitical opportunity inadvertently provided to Zhipu by a foreign government.

      That opportunity is known as Fable 5. In early June, Anthropic introduced it as the public version of its advanced Mythos model, which it had previously described as capable of writing code proficiently enough to pose a global cybersecurity threat.

      Three days later, the US government imposed export controls on the model's release, prohibiting all foreign nationals from accessing it, including Anthropic's own staff.

      Due to compliance issues, Anthropic withdrew both Fable 5 and Mythos 5 from global access on June 12, effectively rendering the most advanced AI model in existence inactive. Developers, enterprises, and governments began to question the reliability of something that Washington could potentially disable.

      In response, Zhipu unveiled GLM-5.2 the following day. This model, boasting 744 billion parameters, is completely open and allows anyone to build upon it for free. It quickly rose to the second spot on Arena's coding leaderboard, trailing only Fable 5. No Chinese model had previously ranked in the global top three on the Artificial Analysis Intelligence Index, where only Anthropic and OpenAI hold higher positions.

      Jefferies labeled this a "milestone for Chinese AI," while JPMorgan forecasted a revenue increase of over 534% this year and a shift to profitability by 2028.

      The optimism is so pronounced that Zhipu's founder engaged in a public exchange regarding it. In a rare interaction on X, Elon Musk speculated that a Chinese alternative to Fable 5 would likely emerge in the first quarter. Zhipu's founder and chief scientist, Tang Jie, countered that it "won't take that long." Musk responded by cautioning that benchmarks do not equate to "true usefulness," and that Anthropic's advantage "manifests in revenue." Tang replied, “Focus is all we need, especially focusing on what intelligence truly is.”

      However, revenue is where the bullish outlook becomes less convincing. Bloomberg Intelligence analysts Robert Lea and Jasmine Lyu remarked that comparisons to Anthropic “do not withstand scrutiny.”

      The American company possesses the resources, operational scope, and research capabilities. They asserted that Zhipu “will likely remain deeply unprofitable,” as rising demand in AI will exacerbate its losses over the next 24 months.

      Following the news of the share sale, the analysts issued a cautionary note. They indicated that this cash-intensive business would require continuous fundraising for three years as the use of agentic AI escalates its operating losses. Viewed in this light, a multibillion-dollar placement appears less like a celebratory achievement and more like a necessary refueling.

      The narrative around migration also raises skepticism. Open-weight models still lag behind the best proprietary systems. Jefferies argued that a ban on Fable 5 will not result in significant revenue for Chinese labs, as most enterprise AI still relies on direct interface access rather than self-hosted, open models.

      Jonathan Zhun Qiu, a partner at Meridian Capital Asia, compared GLM-5.2 to Anthropic's earlier Opus 4.7, suggesting it remains behind Opus 4.8 in coding capabilities. Although the gap is narrowing, it hasn’t been closed.

      What has changed is the political landscape, which is the true essence of the rally. The shutdown of Fable