China's AI firms face a difficult path to profit

Chinese AI startups Zhipu and MiniMax report large losses and are pursuing Hong Kong listings while private funding has weakened and competition is intense.

Two Chinese AI startups have moved toward public markets while reporting substantial losses. Zhipu listed in Hong Kong after raising $552 million at a $6.6 billion valuation. MiniMax is set to list in Hong Kong after large fundraising plans and has reported heavy losses. The firms face high research and development costs, intense competition from larger players, and reduced private capital flows. Key facts: - Zhipu (Knowledge Atlas Technology) raised $552 million at a roughly $6.6 billion valuation and opened about 3.3% above its IPO price on January 8. - Zhipu reported a net loss of 2.4 billion yuan in the first half of 2025 on 190 million yuan of revenue, and its R&D bill rose 86% year-on-year to about 228 million in the first half of 2025. - MiniMax reported $53.4 million of revenue in the nine months to end-September 2025 and a net loss of $512 million for the same period; it was expected to raise about HK$4.2 billion and to begin trading on January 9. - Private funding has declined amid geopolitical tensions, and government support is being directed toward "hard tech" areas such as semiconductors and aerospace, according to reporting. Summary: The recent listings have supplied public capital but both companies continue to show high cash burn and large losses. Zhipu’s IPO extended its runway modestly and MiniMax is due to start trading shortly. Undetermined at this time.