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

      A 2,000% surge has opened a unique fundraising opportunity for Beijing’s Zhipu, further amplified by Anthropic’s disappearance of Fable 5. The pressing question is whether a heavily unprofitable lab can transform this moment into a sustainable business.

      Six months prior, Zhipu was a Chinese artificial intelligence lab recently listed in Hong Kong with a $558 million initial public offering (IPO), pricing its shares at HK$116.2. This week, its shares reached HK$2,980, reflecting a roughly 2,000% increase since January and pushing the company, now known as Knowledge Atlas Technology, to a market value exceeding HK$1 trillion, equivalent to about $128 billion.

      Now, Zhipu aims to capitalize on this moment. Sources familiar with the situation informed Bloomberg that the company is considering a share sale to raise several billion US dollars in Hong Kong, with a potential placement as early as next month. The six-month lock-up period following the IPO will end on July 8. Zhipu also plans to issue shares in Shanghai, and such a deal would significantly overshadow its original listing.

      On Wednesday, the shares climbed as much as 16% but moderated afterwards, closing at HK$2,174.

      The initial takeaway: a hot stock behaving as expected, taking advantage of an opportune moment. The more intriguing aspect is what this rally actually reflects. Investors are not merely betting on a Chinese AI lab; they are also wagering on a geopolitical opportunity inadvertently provided to Zhipu by a foreign government.

      The Fable 5 opportunity

      This opportunity is embodied in Fable 5, which Anthropic introduced in early June as the public version of its robust Mythos model. Prior to this, Mythos was described by the company as potentially capable of writing code that could pose a global cybersecurity threat.

      A few days later, the US government imposed export restrictions on the release, prohibiting access for all foreign nationals, including Anthropic’s employees. Due to the inability to ensure compliance, Anthropic withdrew both Fable 5 and Mythos 5 globally on June 12, leading to the most advanced AI model becoming inaccessible. As a result, developers, businesses, and governments began to question their reliance on something that could be disabled at Washington's discretion.

      Zhipu responded the following day with the launch of GLM-5.2, a 744-billion-parameter model that is entirely open for public use at no cost. It quickly ascended to second place on Arena’s front-end coding leaderboard, only behind Fable 5. Prior to this, no Chinese model had made it into the global top three on the Artificial Analysis Intelligence Index, where only Anthropic and OpenAI rank higher.

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

      The confidence surrounding Zhipu is so pronounced that its founder engaged in a public exchange about it. In response to Elon Musk's comment on X predicting a Chinese competitor to Fable 5 would likely emerge in the first quarter, Tang Jie, Zhipu’s founder and chief scientist, asserted it “won’t take that long.” Musk countered that benchmarks do not equate to “true usefulness,” and that Anthropic's advantage is reflected in revenue. Tang responded by emphasizing that “Focus is all we need, especially focusing on what intelligence truly is.”

      The positive narrative meets financial realities

      However, revenue is the area where the bullish narrative falters. Bloomberg Intelligence analysts Robert Lea and Jasmine Lyu remarked that comparisons with Anthropic “don’t withstand scrutiny.”

      The American enterprise possesses the necessary resources, operational reach, and research capabilities. According to the analysts, Zhipu is likely to remain deeply unprofitable, with escalating operational costs driven by increasing demand for agentic AI in the next two years.

      After the share-sale news, the analysts added a cautionary note. The cash-strapped business will require ongoing fundraising for three years as the operational losses from agentic AI expand. Viewed this way, a multi-billion dollar share placement could appear less like a triumphant move and more like a necessary pit stop for refueling.

      Doubts also arise regarding the migration narrative. Open-weight models still trail behind the best proprietary systems. Jefferies contends that a ban on Fable 5 will not yield substantial revenue for Chinese labs, as most enterprise AI continues to rely on direct interface access rather than self-hosted open models.

      Jonathan Zhun Qiu, a partner at Meridian Capital Asia, rates GLM-5.2 as comparable to Anthropic’s older model Opus 4.7, still lagging behind Opus 4.8 in coding capability. Although the gap is narrowing, it has not yet closed.

      US versus the global landscape

      What has shifted is the political landscape