Chinese AI Firm Zhipu Raises $5B for GLM Research and Computing Infrastructure

Chinese AI company Zhipu announced on September 13 that it has completed a new funding round of approximately $5 billion, consisting of a roughly $2 billion share placement and about $3 billion in zero-coupon convertible bonds. The financing is the company's third equity raise since its Hong Kong IPO in January, coming just two months after a roughly $4 billion placement in July.

In the share placement, Zhipu sold up to 21.965 million new H shares at HK$714 per share to no fewer than six institutional investors, a discount of about 9.96% to the closing price before the announcement. The company expects net proceeds of approximately HK$15.664 billion. The convertible bonds, with a principal amount of RMB 20.14 billion and maturing in September 2027, carry a zero coupon and an initial conversion price of HK$892.50 per share, a premium of about 12.55% to the prior closing price.

Zhipu said about 60% of the proceeds will go toward research and development of its next-generation GLM foundation models, a fully self-training system, and the deployment and upgrade of computing infrastructure. Around 15% will be used for business expansion, strategic investments and potential acquisitions, while about 25% will go toward optimizing its capital structure and general working capital. The company expects to fully utilize the funds by June 30, 2028.