China’s Z.ai raises revenue target 25% after US$5 billion cash injection

Chinese AI firm Z.ai has increased its year-end ARR outlook by 25% to US$3 billion, following a US$5 billion cash injection. This revised guidance was revealed during an investor call, surpassing the previous estimate of about US$2.4 billion. The additional funding will be utilized to enhance computing power, thereby resolving bottlenecks and catering to growing demand for the company's AI services.

As of now, Z.ai's ARR stands at US$1.8 billion for the current year. The company's shares saw a 5.9% rise, closing at HK$720 in Hong Kong, which partially offset a 14.3% decline in its stock price over the past two days. Z.ai has managed to expand its user base by over 1 million in just two weeks since the release of its GLM-5 model in February.

Moreover, the company plans to invest 30 billion yuan (US$4.5 billion) in infrastructure, which could augment computing power by up to 100,000 petaflops, with 40% dedicated to model training and research. In terms of AI applications, Z.ai's co-working tools have gained prominence beyond coding products, with industry orders surpassing 1 billion yuan.

Furthermore, the company is broadening its commercialization efforts through revenue-sharing agreements with major domestic and overseas cloud service providers, beginning in October.