The window for AI IPOs is shrinking

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Hello reader,

There seems to be a growing disconnect between what investors are willing to pour into a private AI company and what they will cough up for those that have gone public.

In recent weeks, Chinese AI companies have raised hefty funding rounds from VC and private equity firms.

Chinese LLM developer Moonshot closed a new funding round that pushed its valuation to US$50 billion. DeepSeek is also looking to raise about US$12 billion in a new round. Both are reportedly preparing for their public debut next year.

Yet, those that have gone public on the Hong Kong Stock Exchange (HKEX) have seen their share prices drop just mere months after their market debut.

The share price of agentic model maker Z.ai, formerly known as Zhipu AI, has tumbled by 26% from its closing peak of HK$2,410 (US$307.10) in July. Fellow model developer MiniMax has seen its share price skid by almost 40% since its market debut on January 9, when it closed at HK$345 (US$43.96).

These developments show how much more scrutiny AI firms face from public markets than from their private backers. Private investors are betting on the growth potential of these AI companies, while the markets want profit.

Even data center operators, some of the biggest beneficiaries of the AI boom, have pushed back or withdrawn their IPO plans.

Australia-based Firmus, which has operations in Southeast Asia, has cancelled its market debut plans. The Nvidia-backed firm’s IPO was expected to be the biggest Australian Securities Exchange listing in almost 30 years, yet that storyline was still not enough to get it to the finish line.

Some investors in the country say “confidence evaporated” for Firmus as it was still unprofitable.

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