Zhipu & Minimax Shares Sink Amid DeepSeek AI Price War

AI Stocks Tumble on Competition Fears

Shares of Chinese artificial intelligence startups Zhipu AI and Minimax fell sharply, extending losses after rival DeepSeek launched a new model and announced significant price cuts. This move has ignited concerns over a brewing price war in China's competitive AI sector, impacting investor sentiment.

Market Performance Overview

In Hong Kong trading, Zhipu AI, listed as Knowledge Atlas Tech, saw its shares decline by 3.4%, while MiniMax Group experienced a more substantial 10% slide. The downturn followed an approximate 9% loss for both companies on the preceding Friday, directly linked to DeepSeek's market announcements.

The Competitive Catalyst

DeepSeek's release of its V4 open-source model, coupled with a 90% price reduction for its API input caches, has been the primary driver of the market reaction. The company claims its new model offers performance comparable to closed-source rivals with lower computing power. Additionally, internet giant Tencent has entered the race by unveiling its flagship Hy3 AI model.

Summary and Outlook

The aggressive pricing strategies signal a new phase of intense competition where cost and accessibility are becoming key battlegrounds. Investors will be closely watching how this price war impacts the profitability and market positioning of major Chinese AI developers moving forward.

FAQ

Q: Why did the shares of Zhipu and Minimax fall?
A: The shares fell due to heightened competition concerns after rival DeepSeek released a new, more efficient AI model and implemented aggressive price cuts on its API services.

Q: Which companies are central to this AI competition in China?
A: Key companies involved include Zhipu AI, Minimax, DeepSeek, and Tencent Holdings, all vying for a greater share of the AI market.

Source: Investing.com