Which is the better investment: a big, established tech group at a relatively modest valuation or an unproven fledgling at hundreds of times forecast revenue? In China’s AI sector, many investors are plumping for the latter.
Shares in Chinese AI start-up Zhipu, listed as Knowledge Atlas Technology in Hong Kong, have more than quadrupled this year to give it a market value of almost HK$250bn, or over $30bn. Those in Minimax Group have more than doubled. Meanwhile, Alibaba and Tencent, local tech giants that are reporting record engagement across their AI platforms, are lower than where they started this year.
That looks counterintuitive. It is true that AI start-ups are a pure-play bet on potentially groundbreaking technologies: Zhipu recently released its new flagship model GLM-5, which it says approaches Anthropic’s Claude Opus 4.5 on some capabilities. And it is also true that the big established platforms’ heavy investment in AI infrastructure could pressure current margins before producing returns.