Zhipu AI revenue jumps 132% in first post-IPO report, missing estimates

Chinese artificial intelligence company Zhipu AI posted worse-than-expected annual revenue growth in its first earnings report since its initial public offering (IPO) in Hong Kong in January. Revenue rose 131.9 per cent year on year to 724.33 million yuan (US$104.8 million) for the year ended December 2025, the Beijing-based company said on Tuesday, lagging an estimate of 756 million yuan by analysts polled by Bloomberg. Zhipu, the first foundational AI model start-up in the world to launch an IPO, reported total losses soaring 59.5 per cent to 4.72 billion yuan in 2025, driven by mounting research and development spending, which jumped 44.9 per cent to 3.18 billion yuan. Adjusted net losses totalled 3.18 billion yuan, a 29.1 per cent increase from the previous year. In a post-earnings call, CEO Zhang Peng said the company was undergoing a shift from its traditional business of providing on-premises model deployment to cloud-based services. “Many clients that initially tried to deploy our open-source models locally are gradually shifting - at least partially - toward using our cloud-based API (application programming interface),” he said. Revenue from cloud deployment increased 292.6 per cent year on year to 190.4 million yuan in 2025, expanding the share of total revenue contributed by cloud deployment to 26.3 per cent, up from 15.5 per cent in 2024. However, this caused gross profit margins to shrink to 41 per cent in 2025 from 56.3 per cent in 2024, as margins for cloud deployment are much lower than on-premises local deployment: 18.9 per cent compared with 48.8 per cent, respectively. Known as Z.ai internationally, Zhipu’s shares fell 5.45 per cent on Tuesday ahead of the earnings results. Zhipu and domestic rival MiniMax, which listed in Hong Kong in early January, have become market darlings in recent weeks as investors have sought exposure to the world’s only listed pure-play AI companies. Their shares have more than quadrupled from their initial offering price, pushing their peak market caps to values higher than established Chinese tech giants such as Kuaishou and Baidu, despite much lower revenues and continued unprofitability. However, in contrast to Zhipu AI, MiniMax posted better-than-expected annual growth in its first earnings report released earlier this month, with revenue rising almost 159 per cent year on year to US$79 million for the year ended December 2025. The Shanghai-based MiniMax also reported year-on-year gross profit margin improvement of 13.2 percentage points to 25.4 per cent, while adjusted net losses only grew 2.7 per cent. Zhipu CEO Zhang said the company was on “sustainable footing” this year as demand in China for AI tokens – the core metric of AI usage – has “exploded” due to the embrace of AI agents such as OpenClaw. Overall demand for model services was exceeding supply, Zhang said, despite the company raising prices for its flagship coding subscription service by 30 per cent and its main API service by 83 per cent. The company’s own OpenClaw-inspired token subscription plan, launched earlier this month, had amassed more than 400,000 subscribers. “We are seeing the beginning of a structural change with the rise of APIs, which is actually something we have been seeking for a long time,” Zhang said. The crucial bottleneck now was no longer demand but supply of computational resources, he added. Since its IPO, Zhipu has struggled to meet growing demand amid ongoing user complaints about poor service quality surrounding flagship products such as the coding subscription service. “We acknowledge that there have been constraints in our computing power supply... but customers still accept our price increases because our foundational model capabilities are indeed industry leading,” he said. Founded in 2019 by professors at Tsinghua University, Zhipu’s flagship model series GLM is ranked as one of the top Chinese models for coding capabilities, according to third-party benchmarking firm Artificial Analysis, while still lagging the US “big three” of OpenAI, Anthropic and Google DeepMind. The company, blacklisted by Washington last year over alleged ties to the Chinese military, has positioned itself as a leading software collaborator with domestic chipmakers as Beijing pursues self-reliance across the entire AI tech stack. It said in its earnings filing that these collaborations had achieved inference efficiency for GLM models on domestic chips “comparable to that of international top-tier chips”.

Zhipu AI revenue jumps 132% in first post-IPO report, missing estimates

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Total losses soar 59.5 per cent to 4.72 billion yuan driven by mounting research and development spending

Total losses soar 59.5 per cent to 4.72 billion yuan driven by mounting research and development spending