Short interest in China's two listed AI model companies — MiniMax and Zhipu AI — has hit record highs at the same time. S&P Global data shows shares shorted in MiniMax now equal 20% of its free float, while Zhipu's sits around 6%. MiniMax reports first-half results after the Hong Kong market closes on Aug. 26; Zhipu follows on Aug. 31. Short sellers are stacking their bets ahead of the numbers.
Both companies were hot stocks when they listed earlier this year. Zhipu is still up more than 800% from its IPO price, and MiniMax more than 80%, but both have fallen more than half from their peaks. After rival model Kimi K3 launched in July, Zhipu and MiniMax each briefly dropped about 24% and 18%, respectively. Zhipu later released GLM-5.3, which Jefferies says performs close to Kimi K3 at roughly 19% lower cost per task — yet the stock hasn't meaningfully bounced.
The share supply is also growing. With IPO lockup periods expiring in July, Zhipu and MiniMax saw 25.68 million and 150 million shares unlocked, worth a combined roughly $11.5 billion at then-current prices. On the other side, southbound funds — mainland Chinese investors buying Hong Kong stocks through the Stock Connect program — have kept buying, lifting their stakes to about 12% of Zhipu and 8.1% of MiniMax. But that hasn't pushed prices back up.
Analysts worry about different things for each company. Hedgeye argues Zhipu is squeezed by price wars, limiting its ability to raise prices and protect margins. MiniMax, meanwhile, is "neither the smartest nor the cheapest." The two interim reports will have to answer one question: Can pure-play AI model companies make money as competition keeps getting cheaper?