Zhipu AI, founded in 2019, is one of China's so‑called "AI tigers" and a rising player in large language models aimed at reducing dependence on U.S. platforms, CNBC reports.
According to an OpenAI blog post, the startup’s name was placed on the U.S. Commerce Department's Entity List in January due to its support for Chinese military AI modernization. Despite that, OpenAI reports Zhipu AI is making "notable progress" as it offers infrastructure solutions directly to governments worldwide.
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Zhipu AI is building sovereign large language model systems, private AI‑in‑a‑box hardware in collaboration with Huawei, and governance frameworks across Southeast Asia, the Middle East, and Africa. The startup has launched joint innovation centers in Indonesia, Vietnam, Malaysia, the United Arab Emirates, Saudi Arabia, and Kenya. According to OpenAI, Chinese media describe this strategy as "China's answer to OpenAI for countries."
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State‑Backed Funding Fuels Zhipu AI’s Expansion
OpenAI says that Zhipu AI benefits from over $1.4 billion in Chinese Communist Party and local government investment while courting Gulf capital. The startup also received $400 million from Saudi Arabia's Prosperity7 Aramco fund, supplementing backing from Alibaba BABA, Tencent, Xiaomi, and others.
According to Beijing Daily, Zhipu AI Chair Liu Debing said during the Vitality China Research Tour media event on June 17 that the company's goal is to push forward China's large model technology and contribute Chinese AI power to the world.
"Our vision is to make machines think like humans," Debing said. "As we push forward China's large model technology, we also aim to contribute Chinese AI power to the world."
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According to OpenAI, Zhipu AI leadership frequently engages with Chinese Communist Party officials, including Premier Li Qiang, and plays an active role in setting China's national AI technical standards. These government ties support its goal of embedding Chinese AI systems into emerging markets before Western alternatives can gain ground.
OpenAI described Zhipu AI's aim as locking Chinese systems and standards into emerging markets while promoting a "responsible, transparent and audit‑ready" alternative to Western AI. OpenAI emphasized that the Chinese Communist Party's push to lead the world in AI by 2030 is a multi-front effort with an "actual, physical front line."
OpenAI Steps Up U.S. AI Diplomacy
OpenAI launched OpenAI for Countries and secured a $200 million contract with the U.S. Department of Defense in June to deliver AI prototypes for national security and enterprise use, CNBC reports. The company also laid the groundwork for its Stargate data campus in Abu Dhabi with Oracle ORCL, Nvidia NVDA, Cisco CSCO, and MGX, backed by $500 billion in private investment. The campus is expected to come online in 2026.
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The rivalry between OpenAI and Zhipu AI represents more than technology competition, reflecting a broader U.S.‑China struggle for digital influence and economic dominance. OpenAI highlighted Zhipu AI's ties to China's military modernization and its global expansion efforts in the blog post, raising concerns about potential strategic and security implications.
OpenAI frames its approach as "cautious optimism," focusing on real‑world benefits while rigorously testing for misuse. The company emphasizes real-world benefits in areas like health, science, and productivity while remaining alert to risks and ethical misuse.
What Lies Ahead for Global AI Leadership
According to CNBC, Zhipu AI is reportedly eyeing an initial public offering after reaching a 20 billion yuan ($2.78 billion) valuation in local markets. Its state partnerships and overseas initiatives position it as a major competitor in the global AI race.
As countries consider AI solutions from different geopolitical spheres, questions around governance models, ethical standards, and transparency remain central to future adoption strategies.
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