Beijing based artificial intelligence company Z.AI has raised a total of $5 billion through a Hong Kong share placement and a convertible bond sale, as Chinese AI developers seek more funding to compete with major US rivals.
The company raised about $2 billion by selling 21.97 million new Hong Kong shares at HK$714 each, representing a 10% discount to its closing price of HK$793 on Friday.
Z.AI also raised 20.14 billion yuan, about $3 billion, through zero coupon bonds due in September 2027. The yuan denominated bonds will be settled in US dollars and were issued at 100.5% of their face value.
The initial conversion price was set at HK$892.50, a 25% premium to the share placement price. Z.AI can redeem all 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.
About 60% of the net proceeds will fund research and development of Z.AI’s next generation AI models and its fully self training system. Another 15% will support expansion, while the remaining funds will be used for working capital, capital structure improvements and other corporate purposes.
The fundraising comes as Chinese AI companies invest heavily in computing infrastructure and skilled workers to compete with larger US technology firms.
Z.AI, formerly known as Zhipu AI, listed in Hong Kong in January and raised about $4 billion through a follow on share sale in July.
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