(Yicai) Sept. 17 -- Z.AI’s shares rose after the Chinese artificial intelligence company previously known as Zhipu AI raised its annual recurring revenue forecast after announcing plans to raise about USD5 billion from a share placement and convertible bond sale.

Z.AI [HKG: 2513] closed 2.8 percent up at HKD740 (USD94.32) in Hong Kong today, after gaining 5.9 percent yesterday. The shares began trading on Jan. 8 at HKD116.20 apiece and surged 2,465 percent to a record high of HKD2,980 (USD379.95) on June 26. They have lost around 75 percent since then.

After the refinancing, Z.AI’s computing power reserves rank among the top independent Chinese AI model developers, and its computing power supply is no longer a major constraint on short-term revenue growth, the management said at an investor conference yesterday. Therefore, the Shanghai-based firm has raised its ARR guidance for the end of this year to USD3 billion from USD2.4 billion.

ARR estimates annual income based on long-term subscription contracts with users, and it is not entirely equivalent to actual annual revenue.

Z.AI launched its flagship foundation model GLM-5 in February. Afterward, demand for model calls surged, pushing the company’s computing power reserves to near depletion. As a result, it temporarily suspended sales of its main product, Coding Plan.

To address the computing power bottleneck, Z.AI completed a share placement of HKD31.4 billion (USD4 billion) in July and revealed plans in June to raise an additional CNY15 billion (USD2.2 billion) through a secondary listing on Shanghai’s Star Market.

Moreover, the company announced on Sept. 13 that it would carry out another share placement of HKD15.7 billion, which was completed yesterday, and issue about CNY20.1 billion of zero-coupon convertible bonds. These funds will be mainly used to develop the company’s next-generation model and build its computing power infrastructure.

In addition to expanding its computing power reserves, Z.AI is actively exploring new business models, such as collaborating with cloud providers to deploy its models in a managed format on cloud platforms. This approach aims to broaden the distribution channels for its models and reduce reliance on its own computing power.

Z.AI has already signed revenue-sharing agreements with several leading cloud service providers, both domestic and international. Related revenue is expected to be recognized from next month, the management team revealed during the investor conference.

Z.AI is also actively promoting its CoWork business, which integrates models into enterprise workflows as AI agents to complete complex tasks. Since the launch of GLM-5.3 in August, the order volume for Z.AI's CoWork business has exceeded CNY1 billion (USD149.1 million), with cybersecurity being the primary application scenario.

Editors: Dou Shicong, Futura Costaglione