OpenAI fingers Beijing-backed Zhipu AI as strong contender despite US ban

Banned in the US, but backed at home, Zhipu AI has been dubbed one of China’s “AI tigers” by local outlets since it burst onto the scene in 2019. Now, it has caught the attention of OpenAI, one of the top AI firms in the United States.

Even though DeepSeek grabbed headlines with its R1 model debut in January, Zhipu, together with other Chinese unicorn startups, armed with large language models, is at the core of Beijing’s ambition to challenge the US and wean itself off foreign tech.

AI tigers are central in Beijing’s strategy

OpenAI’s recent blog post points out that Zhipu is not just another domestic player. State media reports indicate the startup has netted over $1.4 billion from regional governments across China. The firm’s leadership supposedly meets often with Chinese Communist Party officials, Premier Li Qiang among them.

That kind of political capital, OpenAI warns, might steer Zhipu into the heart of Beijing’s “Digital Silk Road” push, embedding Chinese AI frameworks in emerging markets before Western rivals can move in.

“The goal is to lock Chinese systems and standards into emerging markets before US or European rivals can, while showcasing a ‘responsible, transparent and audit-ready’ Chinese AI alternative.”

OpenAI.

Beyond China’s borders, Zhipu has planted flags from London to Kuala Lumpur, and from Dubai to Singapore. Joint “innovation centers” now operate in places like Indonesia and Vietnam, further extending its reach.

The startup has raised funds from several local governments, according to state media. “Zhipu AI leadership frequently engages with CCP officials, including Premier Li Qiang,” OpenAI claimed, pegging the value of state-backed investments in the startup at over $1.4 billion.

The promise is to deliver a “responsible, transparent and audit-ready” AI stack, one that could lock governments into Chinese data standards and infrastructure.

Recently the AI startup introduced its new agent known as AutoGLM Rumination, which it claimed is capable of deep research, web searches, and travel planning.

Zhipu AI sets eyes across the globe despite the US ban

This expansion sets up a direct challenge to OpenAI’s own global ambitions. In May, during a trip to the UAE, President Donald Trump championed a $200 billion slate of tech deals, including a Stargate UAE AI campus slated for 2026. That project brings together OpenAI, Oracle, Nvidia and Cisco in an attempt to cement US-led AI influence in the Middle East.

Meanwhile, OpenAI’s Stargate initiative, a $500 billion private-sector fund launched with Abu Dhabi’s MGX and Japan’s SoftBank, was unveiled earlier this year. Back home, OpenAI also scored a $200 million contract with the US Defense Department and rolled out “OpenAI for Government,” targeting public-sector deployments across America.

Not all of Zhipu’s collaborations are civilian. The startup has reportedly been tapped by China’s military to modernize forces through advanced AI, a connection that landed it on the US Commerce Department’s Entity List in January.

OpenAI is also cautious about the Chinese AI startups and has explained that: “Because we’re fully aware of the power of this technology – hence our incessant red-teaming and other safety/security work.”

“Because while we believe most will use AI for good, we’re not naive about some trying to misuse and abuse the technology. And because we know a world built on democratic AI isn’t a guarantee given China’s ambitions.”

OpenAI.

Despite that blacklisting, Zhipu presses on, it’s taking preliminary steps toward an IPO and has been pegged at a 20 billion yuan (roughly $2.78 billion) valuation by local press.

Whether Zhipu AI ultimately rewrites the rules of global AI competition remains to be seen. What’s clear is that both sides, East and West, are marshalling resources, forging political ties, and pursuing partnerships to shape the next generation of intelligent systems.

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