Key facts
- Zhipu AI's market cap surpassed HK$1 trillion (US$128 billion) on Monday.
- Shares of Knowledge Atlas Technology, Zhipu AI's trading name, surged up to 42%.
- The rally was triggered by the release of Zhipu's open-source GLM-5.2 model.
- GLM-5.2 ranks second globally for front-end web development tasks on the Code Arena list.
- Wall Street analysts initiated coverage with buy ratings, citing China's AI value proposition.
- Zhipu's stock has risen tenfold since its January IPO.
Zhipu AI, trading as Knowledge Atlas Technology on the Hong Kong Stock Exchange, saw its market capitalization surge past HK$1 trillion (US$128 billion) on Monday. The significant jump in its share price, which rose as much as 42% during morning trading, was fueled by investor optimism following the release of its latest open-source GLM-5.2 artificial intelligence model.
The GLM-5.2 model, featuring a 1-million-token context window, has achieved the second-highest global ranking on the Code Arena list for front-end web development tasks, trailing only Anthropic's Claude Fable 5. This performance has positioned Zhipu AI as a strong contender against its US rivals.
Wall Street analysts have responded positively to Zhipu AI's advancements. JPMorgan maintained its overweight rating and increased its target price to HK$1,400 from HK$950, while Bank of America initiated coverage with buy ratings for both Zhipu AI and its domestic competitor MiniMax. The shared thesis among analysts is that as US-based advanced AI models become more expensive and restricted, Chinese firms like Zhipu AI are poised to capture the cost-effective segment of the market.
Zhipu AI's stock has experienced a remarkable rise, increasing more than tenfold since its initial public offering in January. The company has also demonstrated pricing power, having increased its cloud API prices twice this year. The company's open-source approach, emphasizing accessibility and extensibility, contrasts with the trend of US labs restricting access to their most powerful models. This strategy, coupled with the US government's actions against Anthropic, has bolstered investor confidence in Chinese AI developers.
Zhipu's chairman, Liu Debing, has amassed a fortune of $22.4 billion, becoming one of the wealthiest individuals from China's AI boom. Chief scientist Tang Jie is also a billionaire with an estimated net worth of $5 billion. The company's technological progress, including its GLM-5 and GLM-5.1 models which showed improvements in response speed and agent task performance, has shifted perceptions from a marginal player to a significant tech champion.