Z.AI Seeks $5 Billion in Hong Kong via Share Sale and Convertible Bonds

On Sunday, Z.AI, a Chinese artificial intelligence firm listed in Hong Kong and previously known as Zhipu AI, revealed plans to raise around $5 billion through the issuance of new shares and convertible bonds. The company intends to offer approximately 21.97 million new H shares at HK$714 each, targeting a total of about HK$15.7 billion (U.S.$2 billion), which is 9.96% lower than the closing price of HK$793 on Friday. Additionally, Z.AI will issue zero-coupon convertible bonds maturing in 2027, valued at 20.14 billion yuan (U.S.$3 billion). These bonds can be converted into roughly 26.37 million shares at HK$892.50 each, a 12.6% premium over Friday's close, as reported by the Wall Street Journal. The company cites rising demand for AI services and the development of advanced language models as reasons for the increased computing capacity. The funds will also facilitate an expansion of its shareholder base. This fundraising follows a U.S.$4 billion share placement in July, which occurred after a 60-day lock-up period ended. Prior to that, a six-month lock-up on 25.68 million IPO shares held by cornerstone investors concluded; the IPO raised HK$31.4 billion with shares priced at HK$1,588 each. Z.AI competes with OpenAI and Anthropic on a global scale, while domestically, it faces competition from DeepSeek, Moonshot AI, and MiniMax, as Chinese AI companies enhance their infrastructure and large-language-model investments to keep pace with international competitors.