A new chapter has been written in China's AI market, signaling a major shift in the tech landscape. Two AI foundation model pure-plays, Zhipu and MiniMax, saw their market capitalizations surge past HK$300 billion, placing them ahead of established internet giants like JD.com and Trip.com.
The most powerful driver behind this recent rally was the tangible proof of technological progress and monetization potential. First, Zhipu launched its flagship GLM-5 model and immediately followed up by raising prices and reporting sell-outs, a clear sign of strong demand. Second, MiniMax released its M2.5 model, which benchmarks showed was competitive with leading global models in complex tasks like coding. These moves transformed the narrative for investors from 'research-heavy lab projects' to 'commercially viable businesses' on the cusp of rapid scaling.
Of course, this explosive growth didn't happen overnight; it was built on a crucial foundation laid in January 2026: their successful Initial Public Offerings (IPOs). The listings created large, liquid stocks that acted as a gateway for a flood of capital, particularly from mainland Chinese investors through the Southbound Stock Connect program. This provided the financial fuel necessary for the subsequent rally.
Digging deeper, this trend is supported by long-term tailwinds. The Chinese government's push for technological self-sufficiency, a clear regulatory framework that provides legitimacy for AI services, and even U.S. sanctions have paradoxically reinforced the 'national champion' status of these firms. This backdrop created a fertile ground for domestic AI companies to thrive.
Ultimately, the current valuations, which are hundreds of times their last reported sales, reflect immense optimism. Investors are not just buying into current performance but are making a bold bet on the future, pricing in years of hyper-growth and market dominance. The key question now is whether these companies can deliver the financial results to justify such high expectations.
- Market Capitalization: The total value of a publicly traded company's outstanding shares, calculated by multiplying the share price by the number of shares.
- Foundation Model: A large-scale artificial intelligence model trained on a vast quantity of data, designed to be adapted to a wide range of downstream tasks.
- IPO (Initial Public Offering): The process by which a private company first sells shares of stock to the public, becoming a publicly-traded company.