China's Two Leading Listed AI Firms Lose 198 Trillion Won in Market Value... DeepSeek Threat Looms

"Listed in Hong Kong" MiniMax and Zhipu AI

Intensifying domestic competition amid technology gap with U.S. firms

Share prices fall... Lockup expirations add pressure

The market capitalizations of MiniMax and Z.AI, two of China’s leading artificial intelligence (AI) companies, have plunged by about KRW 198 trillion from their peaks. Their share prices have continued to fall amid a technology gap with U.S. AI companies, global price-cutting competition, and the possibility that Chinese rivals will go public.

A MiniMax booth at an artificial intelligence (AI) event in Shanghai, China, on July 17, 2026. AP-Yonhap News

MiniMax closed at HK$160.70 on the Hong Kong stock exchange on October 22, down 6.52% from the previous trading day. Z.AI also closed down 7.10% at HK$460.80. Bloomberg reported that the companies’ combined market capitalization had fallen by about $150 billion (KRW 198 trillion) from the peak they reached after listing in January.

Share prices plunged amid price competition in the AI model market. As Chinese AI companies have recently cut token prices, which determine usage fees, U.S. companies including OpenAI and Anthropic have responded with price cuts of their own. Concerns have also grown that investment demand for existing listed companies could be dispersed as the possibility of initial public offerings (IPOs) by DeepSeek and Moonshot AI is discussed.

MiniMax and Z.AI have also launched new products, but their share prices have remained largely unchanged. MiniMax unveiled its M3.1 Flash model on October 19, significantly reducing token costs and improving performance, but its share price failed to rebound. Z.AI also introduced its GLM-5.3-FlashX model last month, but the market response was cool. According to AI model evaluator Artificial Analysis, the companies’ latest models lag in performance not only behind those of major U.S. companies but also those of DeepSeek, Alibaba, and Xiaomi.

“U.S. models perform well, while DeepSeek is the most efficient,” said Leonid Mironov, a portfolio manager at Gavekal Capital. “It is unclear what competitive edge MiniMax and Z.AI can secure over the long term.” Alex Liu, an analyst at Bank of America (BofA), also said, “China currently has more than 10 AI labs, but they will eventually consolidate into a smaller number. It is difficult to predict which companies will survive.”

Achieving profitability is another challenge. Neither company has yet emerged from the red, and the price-cutting competition for AI model usage fees is making it even harder to turn a profit. JPMorgan expects companies providing AI models and application services to begin generating profits around 2028. However, it said Z.AI is in a relatively more favorable position than MiniMax because of its strength in coding.

The expiration of lock-up periods scheduled for January 2027 is also seen as a drag on share prices. About 178 million Z.AI shares and 25 million MiniMax shares held by pre-IPO investors are expected to become available for trading. Bloomberg reported that concerns over a large volume of shares entering the market are increasing selling pressure.

This content was produced with the assistance of AI translation services.