Beijing-based artificial intelligence company Z.AI Co Ltd raised a total of $5 billion through a Hong Kong share placement and a concurrent convertible bond sale, according to a Hong Kong stock exchange filing published Sunday, September 13.
How the Deal Is Structured
Z.AI launched the offerings on Friday, September 11, raising approximately $2 billion through a share placement and roughly $3 billion through convertible bonds. The company offered 21.97 million new Hong Kong shares at HK$714 ($91.05) each — a 10% discount to Friday's closing price of HK$793. Separately, Z.AI raised 20.14 billion yuan (about $3 billion) through zero-coupon convertible bonds due in September 2027, which will be settled in US dollars despite being denominated in yuan.
The Bond Terms
The bonds were issued at 100% to 100.5% of face value, giving a yield ranging from negative 0.5% to zero. The initial conversion price was set at HK$892.50 — a 25% premium to the HK$714 share placement price. Z.AI retains the right to redeem all, but not part, of the bonds starting February 18, 2027, if its shares trade at or above 130% of the conversion price for 20 out of 30 trading days.
Where the Money Is Going
According to the filing, roughly 60% of net proceeds will fund research and development of the company's next-generation models and its fully self-training system. Another 15% is earmarked for the company's expansion plans, with the remainder going toward optimizing capital structure, replenishing working capital, and general corporate purposes.
Z.AI's Rapid Fundraising Trajectory
This marks Z.AI's third major capital raise in under a year. The company, formerly known as Zhipu AI, went public in Hong Kong in January 2026, generating about HK$4.90 billion in net proceeds from its IPO and an over-allotment option — funds the company said were fully used by August 31. It followed that with a follow-on share placement in July that raised about HK$31.37 billion in net proceeds, of which roughly HK$10.95 billion had already been deployed by the end of August. Together with this latest $5 billion raise, Z.AI has now tapped capital markets three times in roughly eight months.
Part of a Broader Race for Compute Capital
The fundraising comes as Chinese AI developers broadly seek capital for the costly computing infrastructure and talent needed to compete with larger US rivals. Z.AI isn't alone in this push: rival MiniMax also listed in Hong Kong earlier this year, while Moonshot and DeepSeek are reportedly pursuing potential listings in Hong Kong and Shanghai, respectively. Even established giants are following a similar playbook — Alibaba separately raised $3.2 billion via a convertible bond to fund its cloud growth, on top of a $1.5 billion exchangeable bond in July and a $5 billion convertible bond the previous year, as part of a pledged $53.37 billion, three-year AI investment plan.
Why Convertible Structures Are Popular Right Now
By pairing new equity with convertible debt, Z.AI is able to secure substantial liquidity while limiting immediate shareholder dilution, since the debt portion only converts to equity if bondholders choose to do so — a structure that's become increasingly common among Chinese tech companies seeking to fund AI infrastructure without diluting existing shareholders more than necessary upfront.
What's Still Pending
As of the latest filing, the two transactions had not yet fully closed. The share placement would raise approximately HK$15.68 billion before commissions and expenses if all shares are sold, and the exact amount ultimately raised through bond conversion will depend on how and when bondholders choose to convert. For the full filing details, see the Hong Kong Stock Exchange.
With Z.AI's stock trading under code 2513 in Hong Kong, this latest raise underscores just how capital-intensive the Chinese AI race has become — and how heavily even well-funded Chinese labs are now leaning on public markets to keep pace with the scale of compute investment required to stay competitive.