Zhipu AI Challenges OpenAI with $2.78 Billion Valuation and Global Expansion

Zhipu AI, a Chinese AI startup, has been identified as a significant competitor by OpenAI, one of the leading AI firms in the United States. Despite being banned in the US, Zhipu AI has garnered substantial support from regional governments across China, securing over $1.4 billion in investments. The startup's leadership frequently engages with Chinese Communist Party officials, including Premier Li Qiang, which has raised concerns about its potential role in Beijing's "Digital Silk Road" initiative. This initiative aims to embed Chinese AI frameworks in emerging markets before Western rivals can establish a foothold.

Zhipu AI's global expansion includes the establishment of joint "innovation centers" in various countries, such as Indonesia and Vietnam. The startup has also introduced a new agent called AutoGLM Rumination, which is capable of deep research, web searches, and travel planning. This expansion poses a direct challenge to OpenAI's global ambitions, which include a $200 billion slate of tech deals in the UAE and a $500 billion private-sector fund launched with Abu Dhabi’s MGX and Japan’s SoftBank. OpenAI has also secured a $200 million contract with the US Defense Department and rolled out “OpenAI for Government,” targeting public-sector deployments across America.

Zhipu AI's collaborations extend beyond civilian projects, as the startup has reportedly been tapped by China’s military to modernize forces through advanced AI. This connection led to Zhipu AI being placed on the US Commerce Department’s Entity List in January. Despite this blacklisting, Zhipu AI continues to press forward, taking preliminary steps toward an IPO and being valued at 20 billion yuan (roughly $2.78 billion) by local press. OpenAI has expressed caution about Chinese AI startups, acknowledging the potential for misuse and abuse of the technology, and the need for a world built on democratic AI.

The competition between Zhipu AI and OpenAI highlights the broader geopolitical struggle between China and the US in the AI sector. Both sides are marshalling resources, forging political ties, and pursuing partnerships to shape the next generation of intelligent systems. The outcome of this competition remains uncertain, but it is clear that both sides are committed to advancing their AI capabilities and influencing the global AI landscape.