Zhipu AI Aims to Become First Among China’s New AI Leaders to Go Public

Zhipu AI, a company focused on large language models (LLMs), is working to become the first among China’s new wave of AI startups to go public. It recently filed documents with Beijing’s securities regulators, marking the first step toward a potential IPO.

The company stands out as many of its competitors shift away from developing costly foundational models. Instead, they now focus on building applications using existing models. Zhipu is taking a different path by continuing to invest in its own LLMs.

Strong Backing from the Government

This year alone, Zhipu AI has raised over 2 billion yuan, or about 276 million dollars. Most of this money came from Chinese local governments. Hangzhou led the way with a 1 billion yuan investment, followed by Zhuhai with 500 million, Chengdu with 300 million, and Beijing with 200 million.

Unlike earlier years when it relied more on private investors like Alibaba and Tencent, Zhipu is now turning to state support. Its close ties with Tsinghua University, China’s top science institution, may have helped attract government attention.

Competing with Tech Giants and DeepSeek

Zhipu’s main rivals are no longer just other startups. Now it must compete with big tech companies like Alibaba, ByteDance, and Tencent. These giants have deep pockets and strong user bases. DeepSeek, another rising AI company, is also gaining attention with its cheaper and smarter models.

Despite this, Zhipu has an edge in enterprise services. Unlike others that focus on consumer apps, Zhipu mainly serves companies and government clients. These markets often bring more stable and profitable income.

Zhipu’s Early Start in LLMs

Zhipu was founded in 2019, years before ChatGPT launched in late 2022. This gave it a head start in the race to build strong Chinese-language AI models. Since then, it has raised over 9 billion yuan across 14 funding rounds.

While new companies like Baichuan and 01.AI are moving away from building their own LLMs, Zhipu is doing the opposite. It recently launched a general-purpose AI agent powered by its own GLM model and made its code open-source.

Risks of Relying on State Support

Zhipu’s focus on government clients could bring challenges. In the past, China’s older AI firms like SenseTime and Megvii were also supported by the state. They focused on facial recognition tools used in surveillance. But as public spending dropped, those firms struggled.

Zhipu must show it can avoid the same fate. To succeed, it needs to build a broad client base and offer useful products that bring steady income.

Ready for the Next Step

Zhipu is seen as one of the most promising of China’s six leading LLM startups, sometimes called the “AI tigers.” As it prepares to go public, its goal will be to prove it can grow beyond state support and compete in a fast-changing market.