--- title: "A new $5 billion financing round: Zhipu's \"forced capitulation\"" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/43881610.md" description: "Zhipu recently completed a new round of financing totaling $5 billion, with specific details as follows: it sold 21.97 million shares to investors at HK$7.14, a 10% discount to Friday's (Sept 11) close, raising $2 billion; and issued another $3 billion in convertible bonds maturing in 2027 (0% coupon, conversion price of HK$892.5). Regarding this financing, many friends may still have some questions. Question 1: How does the market view this financing? This financing is more like a "forced agreement"; taking the issuance of convertible bonds as an example..." datetime: "2026-09-14T03:09:18.000Z" locales: - [en](https://longbridge.com/en/topics/43881610.md) - [zh-CN](https://longbridge.com/zh-CN/topics/43881610.md) - [zh-HK](https://longbridge.com/zh-HK/topics/43881610.md) author: "[仝志斌](https://longbridge.com/en/profiles/10247393.md)" generator: "portal-rs" --- # A new $5 billion financing round: Zhipu's "forced capitulation" Zhipu recently completed a new round of financing totaling $5 billion, with specific details as follows: It sold 21.97 million shares to investors at HKD 714 per share, a 10% discount from Friday's (Sept 11) close, raising $2 billion; It also issued $3 billion in zero-coupon convertible bonds maturing in 2027 (conversion price: HKD 892.5). Regarding this financing, many may still have some questions. Question 1: How is the market viewing this financing? This financing resembles a "forced agreement." Take the convertible bond issuance as an example: its maturity is only one year away. If Zhipu's stock price fails to reach the conversion price within that year, investors will demand the company redeem the bonds, leaving very little time. Historically, Chinese concept companies issue convertible bonds with maturities of roughly 3-5 years (with 5 years being most common), giving firms ample time to digest earnings and boost their stock price. Once the stock recovers to the conversion price, investors can realize gains through conversion. However, Zhipu's bond tenure is just one year. On one hand, one year is insufficient to go from issuing debt to increasing capital expenditure and realizing returns. On the other hand, massive short-term capex could lead to huge amortization costs, hindering financial improvement. The market likely recognized these issues, compressing the borrowing window to just one year—a clear sign of unfavorable terms. We also noted that MiniMax issued ~1-year zero-coupon convertible bonds in July 2026, maturing in July 2027, with a conversion price of HKD 335 and a premium of ~12.64%. This further illustrates the market's increasingly stringent attitude toward AI financing this year. **Therefore, Zhipu's management must withstand downward pressure on its stock price (which has fallen over 70% from its peak) and hit the conversion price target within this tight one-year window to avoid redemption pressure (which would create new cash flow strain). The responsibility is indeed significant.** Question 2: Why does Zhipu need to raise funds despite weak negotiating power? Whether it's the 10% discount on the equity placement or the one-year convertible bond tenure, Zhipu's negotiating position in this round was undeniably weak. So why proceed? Let's briefly outline Zhipu's business model. Around its IPO, its model relied heavily on "local deployment" (accounting for 85% of revenue)—essentially deploying private large models for governments and large enterprises due to security concerns. However, by mid-2026, "cloud deployment" revenue accounted for 87%. If the former was primarily selling large models and engineering labor, the latter shifts back to the industry-standard "selling Tokens" model. Management summarizes this path as: Selling Models → Selling API Calls → Selling Subscriptions → Selling End-to-End Task Results To become a top-tier player in the large model space, relying solely on local deployment is unsustainable; transformation is inevitable. Who are Zhipu's peers? Overseas: OpenAI, Anthropic, Microsoft, Google. Domestically: Alibaba, ByteDance, Tencent. Yet, Zhipu's H1 2026 capex was only RMB 390 million—a fraction of its competitors' spending. Facing urgent transformation pressure but constrained by limited capex, Zhipu cannot transition without adequate funding. To seize the opportunity, it must accelerate fundraising to plug these gaps. Despite the narrow one-year window, it had no choice but to accept the terms. Question 3: What is the future pressure on Zhipu's stock price? Media recently reported Zhipu's ARR reached $1.6 billion. At its current stock price, the Market Cap/ARR ratio remains around 30x. If ARR hits management's year-end target of $2.4 billion, this multiple would dilute to ~20x. How does this compare? In late July, Anthropic's ARR hit $65 billion, with an implied IPO valuation of ~$2 trillion, resulting in a Market Cap/ARR of ~30x. By comparison, I believe Zhipu's stock is not cheap (especially given Anthropic's clearer market share and profitability). To prove it deserves a higher valuation, Zhipu must deliver faster growth—a significant challenge. I'm not surprised by this financing round. While some argue that raising funds at a price >6x the IPO price just 8 months post-IPO is unfair to secondary market investors, management must seize the current financing window to secure future opportunities. This implies the next year will be the toughest for Zhipu internally. $Z.AI(02513.HK) ### Related Stocks - [02513.HK](https://longbridge.com/en/quote/02513.HK.md) - [BYTED.NA](https://longbridge.com/en/quote/BYTED.NA.md) - [XXX.US](https://longbridge.com/en/quote/XXX.US.md) - [00100.HK](https://longbridge.com/en/quote/00100.HK.md) - [OpenAI.NA](https://longbridge.com/en/quote/OpenAI.NA.md) - [MSFT.US](https://longbridge.com/en/quote/MSFT.US.md) - [GOOG.US](https://longbridge.com/en/quote/GOOG.US.md) - [GOOGL.US](https://longbridge.com/en/quote/GOOGL.US.md) - [00700.HK](https://longbridge.com/en/quote/00700.HK.md) - [ANTH.NA](https://longbridge.com/en/quote/ANTH.NA.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**