Zhipu AI, known as one of China’s “Six Tigers” in developing large language models (LLMs), has secured yet another big-ticket investment of 1 billion yuan ($139.6 million) from two state capital investors in Shanghai as the company charges towards an initial public offering (IPO).
Shanghai-based Pudong Venture Capital Group and Zhangjiang Group jointly made the strategic investment in Zhipu AI, the state investors announced during Zhipu AI’s company event on Wednesday.
The deal makes yet another financing from state investors in this Chinese LLM developer, which is also looking to tap the mainland Chinese stock market with a pre-listing tutorial agreement signed this April.
This billion-yuan deal marks the fifth transaction that Zhipu AI has secured so far this year. Its fundraising sum within the first seven months reached 3 billion yuan ($418.7 million), thanks to a list of all state capital investors linked to local governments in Chinese cities of Hangzhou, Zhuhai, Chengdu, Beijing, and the latest, Shanghai.
With the new deal, Zhipu AI’s latest valuation is estimated to be around 40 billion yuan ($5.6 billion), according to data provider IT Juzi. Its valuation has doubled from over 20 billion yuan ($2.8 billion) in December 2024, when the company secured 3 billion yuan from investors including Legend Capital.
Its earlier investors also include Aramco’s Prosperity7 Ventures, HongShan, Hillhouse Investment, Tencent, Alibaba Group, Xiaomi, and Meituan, just to name a few.
Alongside the fresh funding, Zhipu AI’s CEO Zhang Peng unveiled two developments during the company event—including the release of its next-generation general visual language model, GLM-4.1V-Thinking–aimed at strengthening its market position amid intensifying competition in China’s AI sector, particularly after DeepSeek’s emergence.
Zhipu AI, founded in 2019, has been viewed as one of the top LLM unicorns critical to Beijing’s efforts to rival the US and reduce the country’s dependence on American AI technology.
Just a week earlier, ChatGPT maker OpenAI flagged Zhipu AI wrote in a blog post that the Chinese company has made “notable progress” in providing infrastructure solutions to governments and state-owned firms in non-Western markets. In January, the US Commerce Department included Zhipu AI on its Entity List, effectively blacklisting the company from buying American components.
The macro headwinds, however, are unlikely to affect Zhipu AI’s IPO result in mainland China due to strong government backing that it has received at home. Venture capitalists who specialise in tech investments in China believe that it could even be “an easy win” for the few market-leading, government-endorsed IPO hopefuls, including Zhipu AI.
IPO candidates like Zhipu AI are alike “students by recommendation,” with almost guaranteed IPO wins, particularly on the A-share market in mainland China, Wayne Shiong, a venture partner of China Growth Capital, told DealStreetAsia.
Their IPOs are most likely to be sought-after among stock market investors, said Shiong. “This enthusiasm is associated with how investors in the Chinese market read into their backgrounds. For example, both companies are led by a founding team from elite domestic universities, with state investors on their cap tables.”
