How China's AI Champions Are Testing Investor Appetite for Homegrown Alternatives

China’s emerging AI sector is getting its moment in the spotlight this week. Two leading generative AI startups—Zhipu and MiniMax—are making their Hong Kong debuts, and their performance will gauge investor confidence in whether the country can nurture world-class AI competitors.

The Two Players: Different Paths to the Market

These aren’t interchangeable entries. Zhipu, founded in 2019 by researchers from Tsinghua University under Tang Jie’s leadership, represents China’s academic-driven AI push. The company operates with state backing and targets institutional clients, boasting an 8,000+ organization customer base. MiniMax takes the opposite route—a younger, venture-backed startup that looks and operates more like a Silicon Valley firm, drawing support from Alibaba and Abu Dhabi’s sovereign wealth fund.

The contrast is striking in their business models too. MiniMax monetizes through consumer apps, pulling revenue from over 210 million users via subscriptions and advertising. Zhipu, meanwhile, focuses on enterprise deployments tailored for state-owned companies and major industries that need private, on-premise AI solutions.

The Numbers Tell Part of the Story

Size matters here. In 2024, Zhipu generated 312.4 million yuan (approximately $44.7 million) in revenue, outpacing MiniMax’s $30.5 million. Both companies carry pre-IPO valuations around $4 billion—significant, but modest next to OpenAI’s estimated $13 billion annual revenue and Anthropic’s projected $9 billion.

Yet this disparity in scale doesn’t diminish what’s at stake. Both firms emerged from China’s brutal “Battle of One Hundred Models,” where intense competition drove aggressive expansion. Now they’re positioned to raise serious capital as the country pushes its technological independence agenda.

Why These IPOs Matter Beyond Stock Prices

This isn’t just about two companies going public. According to Aadil Ebrahim, head of equities at Klay Group in Singapore, these listings reflect “a broader policy-driven investment cycle as China ramps up efforts to build a homegrown semiconductor and AI ecosystem.” Recent GPU and AI-related stocks on China’s A-shares and Hong Kong markets have performed strongly, signaling genuine investor appetite.

The retail demand alone is eye-popping: MiniMax’s shares drew over 1,350 times oversubscription, while Zhipu exceeded 900 times, based on margin loan data from Futubull.

The Reality Check

Here’s the catch—and it’s important. Philip Wen, managing director at Hong Kong-based MPM Capital, offers a sobering perspective: “While everyone enjoys seeing rapid gains, the real measure will be how these companies perform six months or a year from now.”

He adds that China’s tech giants like ByteDance, Alibaba, and Tencent will likely maintain dominance long-term, with smaller firms like Zhipu and MiniMax occupying specialized niches. Moreover, as Ebrahim notes, most newly listed Chinese firms in this space remain unprofitable and may stay that way as they scale.

A Broader Momentum Play

These AI debuts follow spectacular performances from Chinese chipmakers seeking independence from Western semiconductors. Moore Threads Technology surged 425% on its Shanghai debut; MetaX Integrated Circuits Shanghai jumped 693%. The pattern is clear: Beijing is opening capital markets to homegrown tech, and investors are betting on the narrative.

Whether that bet pays off depends on whether Zhipu and MiniMax can actually challenge OpenAI and Anthropic—not just in headlines, but in real competitive advantage.