China's Zhipu says AI price war could spread internationally

Zhipu completed a Hong Kong public debut after raising more than $500 million and reported about $27 million in sales for the first half of 2025; chairman Liu Debing said price competition that has lowered margins for Chinese AI firms could spread to U.S. developers.

Zhipu, a Beijing-based maker of large language models and the operator of Z.ai, recently listed in Hong Kong after a public debut that raised more than $500 million. The company disclosed roughly $27 million in sales for the first half of 2025 and substantial research spending over the same period. Chairman Liu Debing said the intense price competition seen in China could spread to U.S. developers as markets mature. Zhipu is pursuing international users while continuing heavy investment in its models. Key details: - Zhipu completed a Hong Kong IPO that raised more than $500 million, marking one of China's early major AI software listings. - The company reported about $27 million in sales for the first half of 2025 and research and development expenses of 1.59 billion yuan in that period. - Zhipu held 2.55 billion yuan in cash at the end of June 2025, according to the disclosures. - Its model-as-a-service platform has about 2.9 million users, with roughly 15% paying customers, and the company charges as little as 20 yuan per month for an AI coder product, which the article said is about one-seventh the cost of a comparable U.S. product. - Zhipu was founded in 2019 by researchers from Tsinghua University and is backed by investors including Alibaba and Tencent as well as regional government funds. - The firm is listed on a U.S. government entity list that restricts some American suppliers from selling certain equipment without a license. Summary: Zhipu's Hong Kong listing and low-price positioning support its push for broader international reach, while the company continues large-scale R&D investment. Chairman Liu has said the price-based competition that compressed margins for Chinese AI companies could extend to U.S. developers as the market evolves. Broader market effects are undetermined at this time.