An AI Company Supported By The Chinese Government

Zhipu AI was once on the U.S commerce Department's export control entity list, being one of the Chinese companies being blacklisted from procuring U.S components.

Now, it is singled out by OpenAI as one of its biggest competitors. In a blog post on Wednesday, OpenAI highlighted that Zhipu AI has made notable progress in advancing AI technology and expanding its influence beyond China's borders.

Despite being a much less notable company than Deepseek, OpenAI points to Zhipu's rapid overseas growth and close ties to the Chinese government as factors that merit closer scrutiny.

Zhipu AI has secured substantial backing from multiple local governments, with state media reporting that its leadership frequently engages with high-ranking Chinese Communist Party (CCP) officials, including Premier Li Qiang.

OpenAI estimates that state-backed investments in Zhipu exceed $1.4 billion, underscoring the company’s strategic importance to Beijing’s AI ambitions.

The startup has established offices in the Middle East, the United Kingdom, Singapore, and Malaysia, and is running joint “innovation centers” across Southeast Asia, including in Indonesia and Vietnam.

These moves position Zhipu as a key player in China’s “Digital Silk Road” initiative, which aims to export Chinese technology and standards to governments worldwide.

“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 stated.

A Rising Threat To U.S.

While the Chinese government is pushing for their own AI companies, American AI companies and the American government are also doing their best to retain the position as the leaders of the AI landscape.

OpenAI recently launched its “OpenAI for Government” initiative, aiming to provide advanced AI tools to public servants across the United States and secure US leadership in AI infrastructure.

Meanwhile, OpenAI’s Stargate Project—a $500 billion private sector investment vehicle—seeks to build next-generation AI data centers in partnership with global tech giants, including Oracle, Nvidia, and SoftBank.

In May, US President Donald Trump announced over $200 billion in commercial deals in the UAE, including the development of the Stargate UAE AI campus by OpenAI, Oracle, Nvidia, and Cisco Systems, set to launch in 2026.

This month, OpenAI was also awarded a $200 million contract to provide AI tools to the US Defense Department, further cementing its role in national security and public sector innovation.

Zhipu’s Military Endeavors

Zhipu AI’s influence extends beyond just technology. The company is reportedly working with China’s military to modernize its capabilities through advanced AI, a factor that led to its addition to the US Commerce Department’s Entity List in January, restricting its access to US technology.

Despite these export controls, Zhipu continues to expand, with plans to launch an initial public offering. The company has previously been valued at 20 billion yuan ($2.78 billion), according to local media reports.

The rise of Zhipu AI underscores the intensifying rivalry between the US and China for global AI dominance. As both nations invest heavily in AI infrastructure, talent, and international partnerships, the battle to set global standards and shape the future of technology is heating up.

OpenAI’s warning about Zhipu reflects broader concerns that China’s state-backed AI firms could gain a decisive edge in emerging markets, challenging US technological leadership and reshaping the global tech landscape.

In a recent interview with Chinese media, Zhipu Chairman Liu Debing recently told reporters that the company aims to “contribute China’s AI power to the world,” signaling its determination to play a leading role on the global stage.