China's Z.AI raises $5 billion in its second multibillion-dollar raise in two months
The Hong Kong-listed lab, formerly Zhipu AI, combined a discounted share placement with zero-coupon convertible bonds -- and says 60% of the proceeds go straight to model development and compute.
Z.AI, the Beijing-based AI lab formerly known as Zhipu AI, raised a combined $5 billion this week through a Hong Kong share placement and a concurrent convertible-bond sale, according to Reuters reporting by Kane Wu, independently confirmed through two separate syndications of the same wire report.
The share placement raised roughly $2 billion through 21.97 million new Hong Kong shares priced at HK$714 (about $91.05) each -- a 10% discount to the prior close of HK$793. Alongside it, Z.AI sold 20.14 billion yuan (about $3 billion) of zero-coupon convertible bonds maturing September 2027, priced at 100.5% of face value with an initial conversion price of HK$892.50, a 25% premium over the share-placement price; the company can call the bonds from February 2027 if its shares trade at or above 130% of that conversion price for 20 of 30 trading days.
This is Z.AI's second multibillion-dollar raise in two months: the company listed in Hong Kong in January 2026 and completed a roughly $4 billion follow-on share sale in July. Per Reuters, the company says 60% of this round's proceeds will go toward research and development of next-generation models and a "fully self-training system," 15% toward expansion, and the remainder toward capital-structure optimization and general working capital.
The use-of-proceeds breakdown is the number worth sitting with: three-fifths of a $5 billion raise earmarked for model development and the compute to run it is a direct, dollar-denominated answer to how much it now costs a frontier-adjacent Chinese lab to stay in the race -- and how much of that cost investors are still willing to underwrite twice in one quarter.