Chinese technology companies are developing advanced artificial intelligence models at significantly lower costs, challenging established global players. Startup Z.ai, formerly known as Zhipu, recently announced its new GLM-4.5 AI model, which it claims will be cheaper to use than DeepSeek. The company is developing what’s known as “agentic” AI, meaning that the model automatically breaks down a task into sub-tasks in order to complete it more accurately. The new model is also open-sourced, allowing developers free access for download and use. Z.ai launched in 2019 and is reportedly planning an initial public offering in Greater China. The startup has raised over $1.5 billion from investors including Alibaba, Tencent and Qiming Venture Partners.
According to Z.ai CEO Zhang Peng, GLM-4.5 only requires eight Nvidia H20 chips to operate, about half the size of DeepSeek’s model. The H20 chip is a product Nvidia customized for China to comply with U.S. export controls. Zhang noted the company currently possesses sufficient computing power and doesn’t need to acquire additional chips. Z.ai said it would charge 11 cents per million input tokens for its new GLM-4.5 model, compared to 14 cents for DeepSeek R1; output tokens will cost 28 cents per million versus DeepSeek’s $2.19.
Other Chinese companies have also launched new, open-source AI models. Alibaba-backed Moonshot previously released Kimi K2, which claimed superiority over OpenAI’s ChatGPT and Anthropic’s Claude in specific coding capabilities. More recently, Tencent released the HunyuanWorld-1.0 model for generating three-dimensional scenes for game development. Alibaba announced its Qwen3-Coder model for writing computer code last week. These developments indicate a growing trend of innovation and competition within China’s AI sector.
Z.ai’s focus is on developing advanced AI models and solutions. The company’s GLM series models are designed to perform complex tasks with greater efficiency and accuracy. This progress comes as OpenAI named Zhipu in a warning about Chinese AI advancement, and the U.S. has restricted American companies from doing business with the startup.
