Chinese AI company Z.AI has launched a Hong Kong share placement worth about $2 billion and a separate $3 billion convertible bond offering, Reuters reported Friday, citing a term sheet it reviewed.
Z.AI, formerly known as Zhipu AI, reportedly plans to use the proceeds for research and development, computing infrastructure, expansion, strategic investments and possible acquisitions.
The Beijing-based company is said to be offering 21.97 million new shares at HK$714 ($91.05) each, representing a 10% discount to its closing price of HK$793 on Friday.
Z.AI is also selling 20.14 billion yuan ($3 billion) of zero-coupon convertible bonds due in September 2027. Convertible bonds can be exchanged for company shares under agreed terms.
The bonds will have an initial conversion price of HK$892.50 per share, which is 25% above the share placement price. They will be denominated in Chinese yuan but settled in U.S. dollars.
The share placement and bond sale are being conducted at the same time but are not dependent on each other being completed, the report said.
CICC is the sole global coordinator for the fundraising and a joint bookrunner with Guotai Junan Securities' Hong Kong unit.
Z.AI's flagship model, GLM-5.3, is currently ranked 10th among frontier models in The Latent Score, with 103.8 points, just behind Moonshot AI's Kimi K3.
U.S. security agencies have accused six Chinese AI companies - DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun and Z.AI - of using distillation to copy capabilities from American AI models. China rejected the claims as "groundless."
Chinese AI companies seek more capital
The fundraising comes only two months after Z.AI raised about $4 billion through a follow-on share sale in July. The company listed in Hong Kong in January.
Chinese AI companies are seeking more capital to pay for chips, data centers and engineering talent as they compete with larger U.S. rivals such as as OpenAI and Anthropic.
Z.AI said in August that its latest model was approaching Anthropic's Mythos 5 in some cybersecurity benchmark tests. The company is competing in China's crowded AI market against developers including DeepSeek, Moonshot AI and Alibaba.
Rival MiniMax also listed in Hong Kong earlier this year. Moonshot is pursuing a possible Hong Kong listing, while DeepSeek is said to be considering an initial public offering in Shanghai.