China's Z.AI raises $5 billion from new share, convertible bond sales, filing shows

(Catch all the Technology News News, and Latest News Updates on The Economic Times.) SynopsisZ.AI launched ‌the sales ⁠on ⁠Friday, offering 21.97 million new Hong Kong shares at HK$714 ($91.05) each, a 10% ​discount to Friday's closing price of HK$793.

ETtechBeijing-based artificial intelligence company Z.AI ​Co Ltd raised a total ​of $5 billion from a Hong Kong share placement ​of about $2 billion and a concurrent convertible bond sale of about $3 billion, the company said in a Hong Kong stock exchange filing on Sunday.

Z.AI launched ‌the sales ⁠on ⁠Friday, offering 21.97 million new Hong Kong shares at HK$714 ($91.05) each, a 10% ​discount to Friday's closing price of HK$793. The company also raised 20.14 billion yuan ($3 ​billion) of zero-coupon bonds due in September 2027, the filing showed.

The yuan-denominated bonds will be settled in U.S. dollars. The bonds ​were issued at 100.5% of their face ⁠value, the ‌filing showed. The initial conversion price is HK$892.50, ​a 25% ​premium to the HK$714 share placement price.

Z.AI can ⁠redeem all, but not part, of the bonds ​from February 18, 2027, if its shares trade ​at or above 130% of the conversion price for 20 out of 30 trading days, according to the sheet. About 60% of the net proceeds will be used for research and development of the company's next-generation models and its fully self-training system, Z.AI ‌said in the filing.

Another 15% of the proceeds will be for the company's expansion plans while the ​rest will ​be used to ⁠optimize its capital structure, replenish working capital for daily operations and for other general corporate purposes, according to the filing.

The fundraising comes as ​Chinese AI developers seek capital for the costly computing infrastructure and talent needed to compete with larger U.S. rivals. Z.AI, formerly known as Zhipu AI, went public in Hong Kong in January and raised about $4 billion in a follow-on share sale in July.

Read more news onZ.AI fundingChina AI investmentconvertible bondsAI infrastructure investmentnext-generation AI modelsresearch and development funding (Catch all the Technology News News, and Latest News Updates on The Economic Times.) Elevate your knowledge and leadership skills at a cost cheaper than your daily tea.

ET Prime special: Know Your Company – Coal India, Part 1: One tonne of coal, two pricesHormuz is a state, not a strait. There are 10 other possible chokepoints for the global economy, including IndiaWill the yuan become the new yen?Bigger or Better: One order from Power Grid Corp added $1 billion to the market cap of a company – Final partBanks have received a flood of money.

Now comes the real testNew aircraft order opens door for ATR assembly line in IndiaAn old India Inc habit: Ignore the nudge, wait for the stickSeason of change in accounting policy: A simple AI prompt can tell you a lotIs crude oil becoming a financial problem?Can going slow on IPOs revive India’s stock market fortunes?