Investors Eagerly Await Kimi’s IPO

In recent months, the funding amounts and valuations of large model startups have been consistently breaking records. Companies like Zhizhu and Minimax, which went public in Hong Kong earlier this year, have seen their stock prices soar, with Zhizhu’s price increasing over sixfold, surpassing Baidu’s market cap despite only generating 0.56% of Baidu’s revenue last year and still facing significant losses.

As these stocks surge, investors are refocusing on large model startups that have yet to go public. On May 6, it was reported that Kimi (also known as the Dark Side of the Moon) is nearing completion of a new funding round worth $2 billion, leading to a post-investment valuation exceeding $20 billion, a fourfold increase in just six months. Kimi has raised over 37.6 billion RMB to date, making it the most funded company among large model startups.

DeepSeek, which recently began external financing, has seen its valuation double in just a few weeks. Initially estimated at $10 billion, it surged to $20 billion after investments from Alibaba and Tencent. Recent reports suggest that the National Integrated Circuit Industry Investment Fund is negotiating to invest in DeepSeek, potentially raising its valuation to between $45 billion and $50 billion.

If all goes as planned, this year could witness an unprecedented capital frenzy in artificial intelligence. Companies like OpenAI, Anthropic, and Elon Musk’s xAI under SpaceX are expected to go public this year, collectively valued at over $3 trillion. Following the listings of Zhizhu and Minimax, there have been repeated rumors about Kimi and Jietiao Xingchen preparing for an IPO in Hong Kong.

Kimi Secures More Funding Before Going Public

Kimi was once the most prominent large model startup in China, attracting investments from major players like Meituan, Alibaba, and Tencent. It was also one of the most aggressive spenders in the market, with monthly advertising expenditures surpassing those of ByteDance and Tencent.

However, after the launch of DeepSeek-R1 in early 2025, Kimi experienced a period of stagnation. Its flagship model, Kimi K1.5, struggled to make an impact against DeepSeek’s success, leading to criticism of its previous reliance on aggressive marketing strategies.

The past year has been one of internal adjustments for Kimi. They paused their aggressive consumer marketing approach and refocused on algorithm and model development, emphasizing open-source community engagement and programming capabilities. Six months later, Kimi released and open-sourced its flagship model Kimi K2, significantly enhancing its code and agent capabilities, regaining market recognition. The K2.5 and K2.6 models launched earlier this year have continued to drive revenue growth amid the lobster frenzy.

As model capabilities improved, the capital markets also renewed their interest. After completing a Series B funding round of over $300 million in August 2024, Kimi did not announce any new funding for 15 months. However, on the last day of 2025, Kimi announced a $500 million Series C funding round led by IDG, with Alibaba, Tencent, and existing shareholders significantly oversubscribing.

In a way, the emergence of DeepSeek has helped Chinese large model startups find differentiated competitive paths. Companies like Zhizhu, Minimax, and Kimi have avoided the crowded space of general AI assistants, instead competing on model code and agent capabilities, leveraging open-source communities and overseas markets for growth.

According to reports, Kimi’s annual recurring revenue (ARR) surpassed $100 million by early March this year, continuing to grow to over $200 million in April. In comparison, Zhizhu’s MaaS platform ARR reached 1.7 billion RMB (approximately $250 million) by March, a 60-fold increase year-on-year.

Although Kimi is slightly behind Zhizhu and Minimax in the IPO process, the soaring stock prices of the latter two may allow Kimi to secure more funding in the primary market. Amid FOMO sentiments, Kimi has become investors’ last ticket before its IPO, as missing out often leads to greater appreciation of value.

This year, Kimi’s funding journey has accelerated significantly. Reports indicate that Kimi completed three funding rounds in January and February, along with the latest $2 billion funding, totaling over $3.9 billion in funding within half a year. With a total funding amount exceeding 37.6 billion RMB, Kimi has surpassed both Zhizhu and Minimax in terms of total financing.

Even some smaller large model startups have benefited from this funding frenzy. At the end of February, reports indicated that Jietiao Xingchen was conducting a new Pre-IPO funding round, with a total financing amount potentially reaching 3.2 billion RMB. However, these amounts are difficult to secure, and many investors are already in line.

The Funding Battle Among Large Model Companies Continues

Despite Kimi’s record-breaking funding amounts and valuations, these funds may still be insufficient to support the future needs of large model competition.

As model capabilities continue to improve, the demand for tokens is also skyrocketing. According to data from the National Bureau of Statistics, China’s average daily token usage exceeded 140 trillion in March, growing over a thousandfold in just two years.

This explosive growth in token usage has significantly increased the pressure on computing costs. In March, major cloud service providers in China, including Tencent Cloud, Alibaba Cloud, and Baidu Smart Cloud, raised their prices within a week, with some models in Tencent Cloud’s Hunyuan series seeing price increases of over 460%.

Since the beginning of the year, several large model companies have raised their API pricing. Kimi’s latest K2.6 model has an input price (cache miss) of $0.95 per million tokens, a 58% increase from K2.5’s $0.60, and an output price of $4, up about 33% from K2.5’s $3.

After the release of GLM-5.1 in April, Zhizhu also raised its input price (cache miss) by another 10% per million tokens. Zhizhu’s CEO, Zhang Peng, stated in the first quarter report that API pricing increased by 83% in the first quarter, yet the market remains undersupplied.

The capital expenditures of major internet giants have also significantly increased. Reports indicate that ByteDance expects its capital expenditure to reach approximately 160 billion RMB this year, with around half allocated for AI chip procurement. Last year, Alibaba announced plans to invest over 380 billion RMB in cloud and AI hardware infrastructure over the next three years, exceeding its total investments in the past decade. Just a few months later, Alibaba announced plans for further increases in investment.

Not to mention the even larger computing infrastructure plans of overseas companies like OpenAI, Meta, and Google. According to recent testimony from OpenAI co-founder and president Greg Brockman in court, OpenAI’s computing expenditures are expected to reach $50 billion this year, with plans to accumulate $600 billion in computing investments by 2030. Meta has also significantly raised its capital expenditure expectations for this year, with total expenditures potentially reaching $145 billion, setting a historical high.

Startups are feeling the pressure of computing costs even more acutely. According to Zhizhu’s previously disclosed financial data, over 70% of the company’s R&D expenditures are allocated to computing services. While revenues for large model companies are increasing, computing costs are also soaring.

The talent war in the large model market is becoming increasingly fierce. Over the past year, researchers from DeepSeek have become targets for major internet companies, with team members frequently leaving. Reports previously indicated that ByteDance recruited former DeepSeek researcher Guo Dayan with an annual salary of nearly 10 million RMB to lead its Seed Agent team.

DeepSeek, which has long refused external financing, is now also compelled to seek more funds. After news of its financing emerged, the company’s valuation has been continuously rising, with the latest estimates reaching $45 billion to $50 billion.

Although Kimi’s founder Yang Zhilin has consistently stated that the company is not in a hurry to go public, rumors about Kimi’s IPO have never ceased. In March, Bloomberg reported that Kimi is considering an IPO in Hong Kong and has had preliminary discussions about its listing plans with CICC and Goldman Sachs. In early February, Jietiao Xingchen, which was reported to have initiated Pre-IPO financing, also indicated plans to go public in Hong Kong this year.

Zhizhu, which has successfully gone public in Hong Kong, is also advancing its A-share listing plans. According to previous announcements from the China Securities Regulatory Commission, Zhizhu aims to pursue an IPO on the Sci-Tech Innovation Board, with Guotai Junan Securities and CICC as its IPO advisory institutions.