Analysis of the Impact of MiniMax's $600 Million IPO on China's AI Industry

According to the latest market news, Chinese general artificial intelligence company MiniMax is about to complete a $600 million IPO, with Alibaba Group and the Abu Dhabi Investment Authority (ADIA) confirmed as key supporters and cornerstone investors [1]. This IPO will take place in Hong Kong, with plans to raise more than $600 million [1].

Alibaba previously announced that it plans to invest $53 billion over the next three years to build AI infrastructure and pursue general artificial intelligence [2]. This huge investment plan reflects the firm confidence of Chinese tech giants in the AI track.

As one of the ‘China AI Tigers’, MiniMax, together with StepFun, Zhipu AI, Moonshot AI, 01.AI, and Baichuan, forms the core force of China’s AI industry [2]. Alibaba’s strategic investment this time will accelerate developments in the following areas:

• Industrial chain integration
  : Alibaba’s resources in cloud computing, e-commerce, finance, and other fields will form a synergistic effect with MiniMax’s AI technology
• Application scenario implementation
  : MiniMax’s general artificial intelligence technology can quickly realize commercial applications in Alibaba’s huge ecosystem
• Technical standardization
  : Endorsement from large tech companies helps promote the establishment and popularization of China’s AI technical standards

DeepSeek’s breakthrough in January 2025 was called China’s ‘Sputnik Moment’, and subsequently, the Chinese government pressured tech companies to accelerate AI development [2]. Companies like MiniMax have received dual support from policy and capital in this context:

• Cost advantage strategy
  : MiniMax CEO Yan Junjie stated that the company is committed to providing comparable services at about one-tenth the cost of OpenAI [2]
• Open-source ecosystem construction
  : Chinese AI enterprises are building global competitiveness through open-source strategies, and some open-source models have already approached or reached the level of leading U.S. models in performance [3]
• Hardware supporting advancement
  : Despite facing chip manufacturing bottlenecks, China is rapidly advancing AI chip production capacity expansion; Huawei plans to produce about 600,000 Ascend 910C chips in 2026 [4]

Goldman Sachs pointed out, ‘AI breakthroughs have rewritten the narrative for tech stocks. The valuation of China’s AI tech ecosystem has been repriced, but it is still relatively cheap compared to the U.S.’ [5]. The participation of Alibaba and the Abu Dhabi Investment Authority will have multiple impacts on valuation:

• International capital endorsement
  : Participation of sovereign wealth funds like ADIA provides a confidence signal to global investors
• Valuation anchoring effect
  : The $600 million IPO will provide a new valuation reference standard for similar AI companies
• Liquidity injection
  : The openness of the Hong Kong market helps attract more international capital to focus on China’s AI sector

• Profitability pressure
  : Data shows that Chinese AI unicorns like Zhipu and MiniMax face expanding losses; from 2022 to 2024, losses increased significantly with accelerated R&D investment [1]
• Technical premium discount
  : Bottlenecks in key technologies such as chip manufacturing may limit valuation [4]

The valuation logic of Chinese AI companies is undergoing the following transformations:

Goldman Sachs predicts, ‘China’s AI computing power is expected to achieve a compound annual growth rate of 40% from 2025 to 2028’ [5], which will provide long-term support for the valuation of AI companies.

• Rise of ‘AI Tigers’
  : Six major AI unicorns have formed an initial competitive landscape, each with advantages in segmented fields [2]
• Giant ecosystem layout
  : Tech giants like Alibaba, Baidu, and Tencent are building AI ecosystems through a combination of investment and independent research and development [4]
• Cost efficiency competition
  : Chinese AI enterprises generally adopt a cost leadership strategy to gain market share with price advantages [2]

The Wall Street Journal reported, ‘U.S. investors are going big on China AI despite concerns in Congress’ [6]. This indicates:

• Capital globalization
  : AI investment has become a global trend, and geopolitical factors have not stopped capital flow
• Technical cooperation demand
  : Global AI development needs China’s market and application scenarios
• Risk diversification strategy
  : International investors diversify risks by allocating Chinese AI assets

Despite positive prospects, China’s AI industry still faces significant challenges:

1. Technical bottlenecks
   : Key technologies such as chip manufacturing and advanced packaging are still受制于 others [4]
2. Profitability
   : High R&D investment makes it difficult to achieve profitability in the short term [1]
3. Talent competition
   : Global competition for AI talent intensifies, and talent costs continue to rise
4. Policy uncertainty
   : Regulatory policies may affect the pace of industry development

1. Focus on technical breakthroughs
   : Continuously track China’s progress in core technical fields such as AI chips and algorithm optimization
2. Evaluate commercialization capabilities
   : Choose companies that can convert technical advantages into sustainable business models
3. Understand ecosystem synergy
   : Attach importance to AI enterprises that have established in-depth cooperation with large tech companies
4. Balance risk and return
   : While pursuing high growth potential, pay attention to the company’s cash flow and profit path

The successful IPO of MiniMax will produce the following chain reactions:

• Accelerate industry integration
  : Capital concentrates on leading enterprises, promoting survival of the fittest in the industry
• Drive technological innovation
  : Sufficient funding support will accelerate technological iteration and breakthroughs
• Expand international markets
  : Listing in Hong Kong helps Chinese AI enterprises expand global business
• 提升估值水平
  : Successful cases will drive up the valuation of the entire AI sector

Goldman Sachs predicts that China’s stock market will rise by about 38% by the end of 2027, and AI will be one of the important driving factors [5]. MiniMax’s IPO will be an important milestone in this process.

[1] Bloomberg - ‘Alibaba, Abu Dhabi Investment Authority Among Reported Participants in MiniMax’s $600 Million IPO’ (https://hk.finance.yahoo.com/news/阿里巴巴-阿布达比投资局等据悉将参投minimax的6亿美元ipo-121902799.html)

[2] Time Magazine - ‘The Architects of AI Are TIME’s 2025 Person of the Year’ (https://time.com/7339685/person-of-the-year-2025-ai-architects/)

[3] Forbes - ‘China’s Open-Source AI Leap Is Quietly Rewriting The Global Playbook’ (https://www.forbes.com/sites/viviantoh/2025/12/15/chinas-open-source-ai-leap-is-quietly-rewriting-the-global-playbook/)

[4] Bloomberg - ‘China’s AI Concept Is Hotly Pursued by Capital, But Behind the Excitement Are Urgent Technical Bottlenecks to Break Through’ (https://hk.finance.yahoo.com/news/中国ai概念获资本热捧-但兴奋背后是亟待突破的技术瓶颈-174208127.html)

[5] Goldman Sachs via Barron’s - ‘Goldman Sachs Is Bullish on China’s Bull Market Investment Opportunities! Alibaba Soars, Tech Stocks Can Continue to Rise on AI Wave’ (https://hk.finance.yahoo.com/news/高盛看好中国牛市投资机会-阿里巴巴飙升-科技股可借ai浪潮续涨-044601623.html)

[6] Wall Street Journal - ‘U.S. Investors Are Going Big on China AI Despite Congressional Concerns’ (https://cn.wsj.com/articles/u-s-investors-are-going-big-on-china-ai-despite-concerns-in-congress-00a3a00d)