China AI Startups Surge Fourfold as Capital Rotates From Big Tech
Chinese AI pure-plays jump fourfold as investors abandon diversified tech giants. MiniMax and Zhipu lead Hong Kong rally while Alibaba and Tencent decline despite strong holiday performance.
Pure-play Chinese AI startups surged in Hong Kong's first post-Chinese New Year trading session on February 17, 2026, as investors moved capital out of diversified tech giants and into focused generative AI companies.
AI Pure-Plays Lead Hong Kong's Post-Holiday Rally
Zhipu (Z.ai) and MiniMax led the session's gains, jumping 25% and 16% respectively. Both stocks have risen more than fourfold since their January Hong Kong listings.
MiniMax's market cap reached HK$260 billion (approximately US$33 billion) by February 17. The company raised HK$4.82 billion (approximately US$619 million) in its IPO at HK$165 per share, with shares surging 78% on debut.
Morgan Stanley, Jefferies, and UBS all initiated buy-equivalent coverage on MiniMax. UBS set a price target of HK$1,000, while Morgan Stanley projects MiniMax revenue could reach approximately US$700 million by 2027, a tenfold increase over two years.
Tech Giants Decline Despite Strong Holiday Numbers
Alibaba and Tencent fell 4.3% and 2.8% respectively in the same session, despite reporting strong Chinese New Year performance.
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Alibaba's Qwen AI app processed 130 million orders during the holiday period. Tencent's Yuanbao app exceeded 50 million daily active users. Neither result prevented stock declines as capital rotated toward pure-play AI names.
"Money is rotating into pure AI names, while diversified platforms such as Alibaba and Tencent are seeing some profit-taking," said Billy Leung, Investment Strategist at Global X Management. "Recent China AI model releases have reignited interest in foundation model leaders."
Dilin Wu, Research Strategist at Pepperstone Group, noted that traditional giants "are under pressure because their core businesses, advertising, e-commerce, and gaming, are showing slower growth than the market had priced in," adding that investors are scrutinizing how quickly AI initiatives will contribute to earnings.
Revenue Growth and Analyst Conviction Drive Rotation
MiniMax's revenue grew sevenfold in one year, from approximately US$10 million in September 2024 to approximately US$70 million in September 2025. Revenue is split roughly equally across consumer apps including Talkie, voice products including Hailuo AI, and its enterprise API platform.
Zhipu raised US$558 million in its Hong Kong IPO, with shares rising 37% on listing despite the company facing a US Entity List blacklisting in January 2025. The stock subsequently surged 43% in a single trading session, with its market cap reaching approximately HK$220 billion.
Moonshot AI's funding round expanded from US$500 million to US$700 million by late 2025, with a potential valuation exceeding US$100 billion, reflecting how post-IPO gains by MiniMax and Zhipu are pulling up valuations across the Chinese AI startup ecosystem.
Hong Kong Emerges as Primary Chinese AI Listing Venue
Hong Kong's 2025 IPO market reached US$36.5 billion across 114 listings, with AI firms including MiniMax contributing significantly through oversubscribed offerings.
Foreign participation in Chinese AI investment fell below 12% by 2025. Domestic capital, including government vehicles such as Big Fund III (US$47.5 billion) and Shanghai state capital's participation in MiniMax's US$300 million Series B, has filled the gap.
Alibaba announced a 380 billion yuan (approximately US$53 billion) three-year AI investment plan. These commitments have not prevented capital from rotating toward leaner AI startups, whose focused revenue models offer investors more direct AI exposure than AI features embedded within large, multi-business platforms.
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