Why Smart Money is Eyeing This October 2025 Hong Kong AI IPO Before Wall Street

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f you have any questions or are interested in learning more about going public and our investor relations service in the IPO space, please reach out to felicia.oyebode@iecapitalusa.com. 

Something interesting happened in January when the U.S. government added Zhipu AI to its Entity List. Instead of folding, the Chinese AI company did what any smart business would do: it found a new playground.

That playground is Hong Kong, where Zhipu is prepping for an October IPO that most investors haven't heard about yet. The company builds AI models that compete directly with OpenAI, has backing from Alibaba and Tencent, and just got a fresh $300 million in funding. 

And it's valued at $2.8 billion.

Here's what also makes this exceptionally worth paying attention to: while everyone's watching the same handful of American AI stocks, Hong Kong's IPO market just hit $40 billion this year—the highest since 2021. Chinese tech companies are quietly shifting their public market strategies, and Zhipu might be the most compelling example yet.

Sometimes the best opportunities come disguised as problems.

When America Says No, Hong Kong Says Welcome

Getting kicked out of the U.S. tech ecosystem would crush most companies. But Zhipu AI turned it into a strategic advantage. The January 2025 Entity List designation that cut off access to American semiconductors and software forced the company to get creative, and Hong Kong offered exactly what they needed.

Think of Hong Kong as the perfect middle ground: close enough to mainland China for regulatory comfort, international enough for global capital, and far enough from Washington to avoid the next round of sanctions. The numbers tell the story of why this works.

The Entity List Exile That Changed Everything

January 2025 marked a turning point when Washington added Zhipu to its Entity List, cutting the company off from critical American technologies. The move targeted Zhipu's reliance on global semiconductor and software ecosystems, essentially kicking them out of the Silicon Valley supply chain that most AI companies depend on.

Zhipu had initially filed for a mainland listing, but the Entity List designation changed the equation. Suddenly, accessing international capital markets became exponentially harder. U.S. institutional investors couldn't touch the company, and European funds started getting nervous about secondary sanctions. The company needed a new plan, fast.

Hence, Hong Kong presented the obvious solution. The city operates under different rules than the mainland while maintaining access to Chinese markets—a regulatory sweet spot that lets companies like Zhipu raise international money without triggering U.S. jurisdiction issues.

The $40 Billion Revival Story

Hong Kong's IPO market exploded in 2025, raising approximately $40 billion compared to just $5.7 billion during the same period last year. That's the highest figure since the record-breaking year of 2021, and Chinese tech companies are driving most of the activity.

Zhipu fits perfectly into this trend. The company's potential $300 million raise puts it among the larger tech debuts, while other Chinese AI leaders like MiniMax are reportedly planning their own Hong Kong listings this year. The city streamlined its listing rules specifically to attract mainland tech giants, offering dual A and H share listings and expedited approvals that make the process faster and cheaper than traditional routes.

The regulatory framework works in Zhipu's favor because Hong Kong aligns with Beijing's priorities rather than fighting them. Companies can tap into China's "Digital Silk Road" strategy and leverage infrastructure investments across Asia and the Middle East—opportunities that would be impossible with a U.S. listing.

Three Advantages Zhipu Can't Get Anywhere Else

Hong Kong gives Zhipu access to exactly the right kind of money. The city's investor base includes wealthy mainland Chinese individuals and institutional players who understand AI technology and want exposure to cutting-edge companies. These investors aren't scared off by geopolitical tensions—they see them as buying opportunities.

The regulatory benefits run deeper than just avoiding U.S. scrutiny. A Hong Kong listing sidesteps Foreign Corrupt Practices Act compliance requirements and SEC probes into Chinese firms' financial transparency. That saves time, money, and eliminates the risk of getting caught in Washington's next regulatory crackdown.

Most importantly, Hong Kong lets Zhipu operate in both worlds. The company can access international capital markets while maintaining its connections to Chinese government support and domestic partnerships. That dual access could prove invaluable as the AI market splits along geopolitical lines.

The Bull Case, The Bear Case, and Your Best Move

Every great investment story comes with a catch. Zhipu AI offers the chance to own a piece of China's AI future, but that future comes with geopolitical landmines, valuation questions, and timing challenges that could make or break returns. The company's valuation and IPO timeline create a narrow window for investors to decide whether this opportunity outweighs the clear-cut risks. The question becomes whether you can stomach the uncertainty long enough to see if Zhipu's strategy pays off.

The Things That Could Go Wrong

Geopolitical tensions remain the elephant in the room. U.S.-China relations could deteriorate further, triggering secondary sanctions or tech embargoes that would crater investor confidence overnight. Washington has already banned Zhipu from accessing American technologies—what happens if they decide Hong Kong listings deserve the same treatment?

Valuation pressure presents another headache. Hong Kong's market has delivered mixed results for AI companies that can't prove sustainable revenue models. Zhipu relies heavily on government contracts and partnerships with companies like SAIC Motor and Huatai Securities, which might satisfy Beijing but won't impress profit-focused institutional investors who want to see diversified revenue streams.

Additionally, regulatory uncertainty cuts both ways. While Hong Kong helps Zhipu avoid U.S. rules, the company still operates under Beijing's jurisdiction. China's policies on data security and AI ethics keep changing, and what looks like a regulatory advantage today could become a compliance nightmare tomorrow. The government giveth, and the government can taketh away.

The Upside That Has Everyone Talking

Zhipu's recent funding activity tells a compelling story. The company raised $140 million from Shanghai's state-backed investors in 2025, followed by a 300 million yuan investment from the Chengdu municipal government. That level of multi-government support gives Zhipu resources that most competitors can only dream about—and signals Beijing's serious commitment to the company's success.

The technical advantages deserve attention, too. Zhipu claims its GLM4 model outperforms OpenAI's GPT-4 on critical benchmarks, positioning the company as a technological peer rather than a follower. The open-source strategy behind GLM models creates accessibility and adoption advantages that could accelerate market penetration in regions where price sensitivity matters or where OpenAI solutions remain inaccessible.

Market timing works in Zhipu's favor as well. Five Chinese tech firms, including chipmaker Fortior Technology, most recently, achieved strong IPO outcomes in Hong Kong, proving investor appetite exists. The company's cost-effective alternatives, like GLM-Z1-32B-0414, could also capture significant market share in applications where Western solutions cost too much or face regulatory barriers.

Your Playbook for October and Beyond

October 2025 marks the critical decision point when Zhipu files its formal IPO paperwork. Investors should track Hong Kong's tech IPO pipeline and compare Zhipu's valuation multiples against peers like Lens Technology, which debuted at a 10x revenue multiple. Those metrics will determine whether the company prices reasonably or gets ahead of itself.

Short-term traders should focus on Hong Kong market sentiment and geopolitical headlines that could swing Zhipu's stock price. The company operates in a news-driven environment where U.S. policy announcements or Chinese government statements can move prices 20% overnight. Volatility creates opportunities for those with strong stomachs and quick reflexes.

Long-term investors should evaluate Zhipu's open-source model strategy and MaaS platform ambitions. The GLM-4.1V-Thinking model and AI-as-a-Service approach could create a defensible competitive moat that sustains returns over multiple years. The key question becomes whether Zhipu can monetize its technical advantages before geopolitical pressures or competition erode its position.

What Happens Next Could Define the Decade

Zhipu AI's Hong Kong IPO represents something bigger than one company going public. The move signals how the global tech industry will split along geopolitical lines, with Chinese companies building parallel ecosystems that compete directly with Silicon Valley giants.

The investment case comes down to a simple question: Will China's AI upstarts thrive independently, or will geopolitical isolation limit their global reach? Zhipu's October listing could provide early answers. 

Investors who get this right could own a piece of the next phase of AI development. Those who get it wrong will learn expensive lessons about geopolitical risk. The clever play involves watching Zhipu's valuation metrics, institutional backing, and early trading performance before making big bets.

October will tell us whether Hong Kong can become the new center of gravity for Chinese tech IPOs, and whether companies like Zhipu can build global businesses from regional foundations. The fractured tech world creates both opportunities and pitfalls—the winners will be those who can see clearly through the complexity.

If you have any questions or are interested in learning more about going public and our investor relations service in the IPO space, please reach out to felicia.oyebode@iecapitalusa.com. 

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