There is no end in sight for the selloff in China's artificial intelligence model developer stocks, with competition growing more heated and the threat of rival listings next year. Mini Max Group Inc. and Z.AI Co., also known as Zhipu, have shed a combined $150 billion in market value from their respective highs. The slide marks a brutal reversal after the duo's hotly anticipated market debuts in January.
Domestic AI firms continue to slash token prices, while global giants Anthropic PBC and Open AI have followed suit to minimize Chinese models' cost advantage. Potential initial public offerings by Deep Seek and Moonshot AI could divert investor cash away from Mini Max and Zhipu, the only listed Chinese pure plays. "Zhipu and Mini Max need to figure out how to win in the long term," said Leonid Mironov, a portfolio manager at Gavekal Capital.
Mini Max slid below its IPO price Thursday, wiping out a gain of 650% from its March peak. Larger peer Z.AI has tumbled 81% from its June high. The new M3.1 Flash model released by Mini Max on Monday provided no lift for its stock, despite sharply reduced token costs and improved performance. According to the Artificial Analysis Intelligence Index, the pair's latest offerings trail models from US leaders in intelligence and even slightly trail Deep Seek, Alibaba Group Holding Ltd. and Xiaomi Corp.
On the plus side, Chinese models continue to dominate global usership. Mini Max already gets most of its revenue from outside China, while Zhipu's API is gaining traction with global developers, JPMorgan Chase & Co. strategists wrote. Both companies remain unprofitable, and global price wars make the outlook tougher. Adding to pressure, about 178 million Z.AI shares and 25 million Mini Max shares held by pre-IPO investors become eligible for trading in January.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing