Chinese artificial intelligence large-model developer Z.AI has completed a placement of new H shares and an offering of renminbi-denominated, US dollar-settled zero-coupon convertible bonds, raising a combined HKD39.3 billion (USD5.02 billion). Linklaters, Tian Yuan Law Firm and A&O Shearman provided legal support on the transactions.
The fundraising marks Z.AI’s second share placement since its listing on the HKEX in January this year. The company previously completed a H-share placement in July, raising around HKD31.4 billion.
Z.AI issued around 21.97 million new H shares at a placement price of HKD714 each, representing about 4.5% of its enlarged issued share capital and raising around HKD15.68 billion. The company also issued RMB20.14 billion (USD3.01 billion) of US dollar-settled zero-coupon convertible bonds due in 2027, with an initial conversion price of HKD892.5 per share.
Linklaters acted as Z.AI’s Hong Kong, English and US legal counsel, led by partners Christine Xu, Taiki Ki, Oliver Zhong and Queenie Tong.
Tian Yuan advised the company on PRC law. The team was led by managing partner Wu Guanxiong and partner Wang Yanchun, and included partner Han Xukun.
China International Capital Corporation acted as the sole global co-ordinator. A&O Shearman counselled the placement agents on international law.
The company’s offering announcement stated that the proceeds would mainly be used for R&D into next-generation models, the deployment of training and inference computing resources, and related infrastructure, business expansion, strategic investments and potential acquisitions, working capital and other general corporate purposes.
Z.AI’s 2026 interim results show that R&D expenditure reached RMB2.13 billion in the first half, about 2.2 times its revenue of RMB954 million for the same period, while the company recorded a net loss of RMB2.07 billion during the period. With R&D investment continuing to rise, the company faces substantial funding requirements.
