Chinese artificial intelligence developers intensified their capital-raising push on Monday, with ByteDance signing a $29.6 billion syndicated loan and Z.ai completing a $5 billion fundraising round that sent its shares down more than 10%.
Z.ai, the Beijing-based company formerly known as Zhipu AI, raised about $2 billion through a Hong Kong share placement and roughly $3 billion through convertible bonds. The new shares were priced at HK$714, a 10% discount to Friday’s HK$793 close. Proceeds will fund research and development, computing infrastructure, expansion and potential investments and acquisitions. The financing follows another $4 billion raise in July, highlighting how capital-intensive the race against OpenAI, Anthropic and Chinese rivals has become. Asian AI stocks also sold off sharply after leading industry executives called for a slower pace of model development over safety concerns.
Revenue is growing rapidly: first-half revenue rose 400% to 953.9 million yuan, and Macquarie said annual recurring revenue reached about $1.6 billion by August, with a potential approach to $3 billion by year-end. Jefferies cut its target price to HK$1,183.79 from HK$1,299.80, saying Z.ai’s ARR guidance beat expectations but its “sustainability remains questionable”, citing customer concentration, uneven compute supply growth and competitive pressure. Goldman Sachs initiated coverage with a HK$1,880 target, arguing Z.ai’s coding strength could sustain frequent model upgrades.
Separately, ByteDance signed a $29.6 billion syndicated loan with 28 banks, including Industrial and Commercial Bank of China and HSBC. The three-year unsecured facility can be extended twice for one year, creating a potential five-year term, and its opening interest margin was reported at 68 basis points above the Secured Overnight Financing Rate. The loan grew from an initial $20 billion target after lender demand exceeded expectations, with Chinese banks providing more than 60% of the financing and Citigroup and JPMorgan coordinating.
ByteDance has not publicly detailed how much of the loan will go to processors, data centers or model development, but people familiar with the financing said AI investment drove borrowing needs. Reuters reported the company may use some funds for AI chips and data centers, including overseas facilities in Southeast Asia, while Bloomberg previously reported ByteDance was considering capital spending of as much as $70 billion in 2026. ByteDance remains privately held, with a reported valuation of about $550 billion from a February secondary share sale.
