Z.ai raises $5bn in Hong Kong including $3bn of zero-interest bonds

Z.ai, the Chinese model developer listed in Hong Kong as Zhipu, has raised about $5bn in a single move. Roughly $2bn came from placing 21.97 million new shares at HK$714, about 10 percent below the previous close.

The other $3bn came from RMB 20.14bn of convertible bonds maturing in September 2027, and those bonds carry no coupon at all.

Reuters reported the terms from the company’s filing. The bonds were priced to yield between minus 0.5 percent and zero, so buyers are taking a small certain loss on the debt in exchange for the option underneath it. They can convert at HK$892.5, a 25 percent premium to what the placement investors paid.

Lending money at a negative return only makes sense if the equity is what you actually want. On those terms, the bond is less a loan than a ticket, and the size of the book suggests plenty of people wanted one.

The money is earmarked for research, computing resources and infrastructure, expansion, strategic investments, possible acquisitions and working capital, which covers most things a company can legally do. The computing line is the one with a hard constraint behind it.

Z.ai has already built a data centre without Nvidia, running instead on Chinese-made accelerators, and scaling that approach is expensive in a way that buying the market leader is not. The company has not said how much of the $5bn goes to compute, or what it plans to buy with it.

In June, after its stock rose roughly 2,000 percent from a January listing, Zhipu was preparing a placement of several billion dollars. Analysts at the time said the company would stay deeply unprofitable and would need to keep raising for about three years. The first of those years is going well.

Revenue is climbing even though the product is largely free. Z.ai is approaching $1bn in sales while giving its strongest models away, and the stealth model that beat DeepSeek earlier this year was its GLM line. Open weights and a rising share price have so far proved compatible.

Z.ai priced the placement against Friday’s close. Two days before that, the NSA, FBI and CISA had named the company in an advisory on industrial-scale distillation, one of six Chinese firms the agencies accuse of extracting capability from American models.

The advisory alleges Z.AI pulled billions of tokens from GPT-5.5 and Claude Opus by mid-2026. Beijing called the advisory unfounded. Hong Kong investors put $5bn in three days later.

Export controls were written to restrict Chinese access to chips, and capital was never covered. Moonshot is reportedly raising $5bn of its own. Washington writes the rules on hardware, Hong Kong writes the cheques, and nothing in this week’s filing suggests the two are about to meet.