Chinese artificial intelligence company Zhipu AI is drawing fresh investor attention after a major rally in its Hong Kong-listed shares and a sharp increase in its valuation outlook from Morgan Stanley.
Morgan Stanley raised its price target for Knowledge Atlas Technology, Zhipu AI’s listed entity, to HK$990 from HK$560. The increase represented a 77% revision and reflected growing confidence in China’s frontier AI market.
AI Infrastructure Drives Investor Optimism
The bullish outlook came as Morgan Stanley highlighted stronger model usage, pricing power and improving efficiency across China’s AI sector. The bank expects leading Chinese foundation models to capture rapidly expanding demand as businesses increase spending on AI inference and applications.
Zhipu has also strengthened its computing infrastructure. In July, its shares jumped 37% to HK$1,219 after reports that the company had completed a 1-gigawatt AI computing center powered entirely by Chinese chips.
The facility is expected to support the training and deployment of Zhipu’s GLM family of models. The company also completed the acquisition of XCore Sigma, a Chinese infrastructure software developer focused on heterogeneous computing and AI inference.
Zhipu Expands Its AI Ambitions
Zhipu has emerged as one of China’s most closely watched AI model developers. Its GLM models compete in a market that includes DeepSeek, MiniMax and major technology companies.
Morgan Stanley has pointed to China’s engineering efficiency as a key advantage. Chinese AI developers are increasingly focused on delivering competitive model performance at lower inference costs.
The company has also continued to raise capital to fund its expansion. In July, Zhipu completed a roughly $4 billion Hong Kong share sale, giving it additional resources for research, computing capacity, talent and strategic investments.
However, the sharp rise in the stock has also increased valuation risks. Investors must weigh Zhipu’s rapid growth against heavy AI infrastructure spending and intense competition.
For now, the combination of stronger computing capacity, rising AI adoption and supportive analyst forecasts has kept Zhipu at the center of China’s fast-moving AI investment story.
