In its first annual earnings report since its landmark Hong Kong IPO, Zhipu AI (listed as Knowledge Atlas Technology, 02513.HK) revealed a complex financial picture of hyper-growth coupled with massive capital burn. While the company’s revenue more than doubled, its net loss widened by approximately 60%, reaching 4.72 billion yuan (approx. $686.5 million) for the fiscal year ending December 31, 2025.
The results underscore the high-stakes “arms race” in China’s AI sector, where independent developers are spending billions on R&D to match the pace of global giants like OpenAI.
1. Financial Snapshot: Revenue vs. Burn
Despite the widening losses, Zhipu AI emerged as the highest-revenue independent large language model (LLM) developer in China for 2025.
| Metric | FY 2025 (Actual) | Change (YoY) |
| Total Revenue | 724 million yuan ($105.3M) | ↑ 131.9% |
| Net Loss | 4.72 billion yuan ($686.5M) | ↑ 59.5% |
| R&D Expenditure | 3.18 billion yuan ($462.7M) | ↑ 44.9% |
| Gross Margin | 41.0% | ↓ (From 56.3% in 2024) |
2. The Cloud Engine: Scaling the API
The most significant shift in Zhipu’s business model was the explosion of its Model-as-a-Service (MaaS) platform.
- Cloud Surges: Revenue from its “Development Platform & API” business grew by 292.6%, contributing over 26% of total revenue.
- Efficiency Gains: While overall margins compressed due to the shift toward cloud, the gross margin of the API platform itself improved from a meager 3.3% in 2024 to 18.9% in 2025.
- Pricing Power: Demonstrating strong demand, the company implemented an 83% price hike for its API services in early 2026. Despite this, usage volume grew by 400% in Q1 2026.
3. “Intelligence Upper Limit” Strategy
CEO Zhang Peng attributed the widening losses to the company’s strategic “Intelligence Upper Limit × Token Consumption Scale” framework.
- R&D as a Moat: The company invested 439% of its total revenue back into research and development.
- Enterprise Adoption: Zhipu reported that nine out of China’s top ten internet firms have deeply integrated its GLM models into their ecosystems.
- Global Footprint: As of March 2026, the company serves over 4 million registered users across 218 countries and regions.
4. Market Reaction: The “HK$400 Billion” Valuation
While a $680M+ loss might alarm traditional investors, the Hong Kong market has rewarded Zhipu’s aggressive growth.
- Stock Performance: Since debuting at HK$116.2 on January 8, 2026, the stock has seen massive accumulation, briefly pushing the company’s valuation toward the **HK$400 billion** mark.
- IPO War Chest: The January listing raised HK$4.4 billion (US$561 million), providing the company with a significant liquidity buffer to continue its R&D binge through 2026.
5. Looking Ahead: The Path to Profit
Management expects to reach profitability through a combination of operating efficiency and the continued rollout of high-margin “Enterprise AI Agents,” a segment that already grew 248.8% in 2025. However, with “compute shortages” recently causing a 23% slide in stock price in February 2026, the company’s ability to secure GPUs remains the single largest risk to its 2027 profit targets.
