Zhipu AI, a prominent Chinese artificial intelligence developer, has priced its Hong Kong share offering at the lower end of its projected range, raising approximately HK$31.41 billion ($4.01 billion). The company sold 19.78 million shares at HK$1,588 each, a price that represents a 13% discount to its previous closing price. This accelerated bookbuild increases Zhipu's share capital by about 4.2%.

The fundraising comes as Chinese technology firms increasingly tap Hong Kong's markets to finance growth, aiming to compete with U.S. counterparts in AI development. Despite strong investor interest in Chinese AI companies, concerns over high valuations are making buyers more selective. The substantial capital infusion will provide Zhipu with significant resources for research and development, hiring, and expansion, but also heightens pressure to demonstrate commercial viability.

Zhipu plans to allocate the proceeds towards R&D, computing capacity, and strategic investments. The deal occurs amidst potential regulatory scrutiny from Beijing, which is reportedly considering restrictions on overseas access to advanced AI models. This move could impact how Chinese AI firms operate internationally. Zhipu previously raised HK$4.35 billion in its IPO earlier this year.