July 9, 2026, (Inside AI) — Shares of Chinese AI developer Zhipu AI and chipmaker Iluvatar CoreX Semiconductor surged Thursday after both launched secondary share placements aiming to raise billions of Hong Kong dollars.
Zhipu AI, developer of the GLM-5.2 model, is seeking HK$31.4 billion. Iluvatar CoreX targets HK$7.1 billion for hardware and research.
The move comes despite recent lock-up expirations after their initial public offerings, which freed cornerstone investor shares. Robust demand signals confidence in China's AI infrastructure build-out.
Timing the Market for Chip Ambitions
Surging valuations and favorable sentiment opened a window for the two mainland firms. Their share sales exemplify a growing playbook: newly listed Chinese tech companies quickly returning to Hong Kong's equity markets after debuts.
This strategy, seen before with firms like SenseTime, leverages post-IPO momentum. But it also raises questions about long-term capital planning.
Zhipu AI competes with the likes of Baichuan and Moonshot AI in China's fierce large language model race. The fresh capital likely targets compute clusters for training next-generation models.
Iluvatar CoreX, meanwhile, designs GPUs for AI workloads, aiming to reduce reliance on Nvidia amid U.S. export controls. Its Tiangong series chips are already in production.
Geopolitical Undercurrents and Capital Strategy
The fundraisings unfold against a backdrop of tightening U.S.-China tech tensions. Washington recently expanded restrictions on advanced chip exports, pushing Chinese firms to accelerate domestic alternatives.
Iluvatar CoreX's placement likely funds its next-gen 7nm GPU development. Zhipu AI may use proceeds to scale its 10,000-GPU training clusters, a necessity for models surpassing GLM-5.2.
Yet, secondary placements so soon after IPOs can dilute early investors. Lock-up expirations often trigger sell-offs, but both stocks rallied on the news.
Analysts note that Hong Kong's market has seen a wave of such deals. In 2025, Chinese tech firms raised over HK$200 billion via follow-on offerings, per Refinitiv data.
"This is becoming a standard capital markets tool for growth-stage AI companies in China," said Ming Zhao, a Shanghai-based equity analyst.
Critics argue that aggressive fundraising may signal cash burn rather than strategic investment. Zhipu AI's reported $800 million annual compute costs underscore the pressure.
For Iluvatar CoreX, the race is against Huawei's Ascend and Biren Technology. The chipmaker must prove its architecture can scale while maintaining yields.
Both firms declined to comment on specific use of proceeds. However, filings indicate Zhipu AI will allocate 60% to R&D and 40% to working capital.
Iluvatar CoreX plans to spend 70% on chip fabrication and packaging partnerships. The remainder goes to software ecosystem development.
The market's reaction suggests investors are betting on a prolonged AI capex cycle. But if model commoditization accelerates, returns could disappoint.
As Hong Kong cements its role as a funding hub for China's AI ambitions, the secondary placement trend is likely to continue. The question is whether these capital raises will translate into sustainable competitive moats.
