Goldman Sachs has identified Zhipu, DeepSeek, and ByteDance as its preferred Chinese artificial intelligence models, according to a research report released by the investment bank on Friday. While Zhipu is the only publicly traded company among the three, analysts emphasize that all three firms are demonstrating “near-frontier” performance that challenges global proprietary models in key efficiency metrics.
Zhipu’s Market Position and Public Valuation
Goldman Sachs initiated coverage on Hong Kong-listed Zhipu, also known as Knowledge Atlas, with a price target of 1,880 Hong Kong dollars. This target represents a potential 15% upside from the stock’s recent closing price. Since its public listing in January, the company has seen its share price climb 70% over the last 60 trading days.
Analysts attribute this momentum to the GLM-5.2 model, which they note has reached performance levels rivaling Anthropic’s Fable 5. According to the Goldman report, Zhipu’s extensive adoption among coders and domestic enterprises provides a sustainable path for frequent model upgrades, securing its competitive edge in the enterprise AI sector.
Did you know? While Zhipu has seen a 70% surge in share price over the last two months, other major tech players have faced volatility. During the same 60-day period, Alibaba shares fell nearly 10%, while Tencent shares dropped about 5%.
Comparing the Front-Runners: Zhipu, DeepSeek, and ByteDance
While Zhipu, DeepSeek, and ByteDance emerged as the top choices, the report highlights different strengths for each:
- ByteDance: Cited as the leader in AI video generation capabilities.
- Zhipu and DeepSeek: Outperformed competitors like Alibaba, Tencent, and Minimax in both time-to-market speed and aggregate arena scores.
The performance gap between these firms and their peers is significant. For example, Minimax has experienced a decline of more than 70% in the Hong Kong markets over the same 60-day window where Zhipu saw gains.
The Rise of Agentic AI and Computing Constraints
The shift toward “Agentic AI”—systems capable of performing complex tasks autonomously—is driving demand for cost-effective, high-performance models. Goldman analysts noted that China’s open-source and open-weight models are reaching a critical performance threshold compared to global proprietary alternatives.
However, the sector faces structural hurdles. Access to computing power remains the primary “swing factor” for future growth. According to the report, the long-term success of these companies will depend on how they navigate US-China regulatory environments, balance sheet stability, and the efficiency of their inference processes.
Pro Tip: When evaluating AI investments in the Chinese market, look closely at inference efficiency. As models grow, the ability to deliver high-quality results with lower computational costs is becoming the primary differentiator between market leaders and those losing value.
Frequently Asked Questions
Why is Goldman Sachs prioritizing Zhipu, DeepSeek, and ByteDance?
According to Goldman’s research, these three firms currently lead in “time to market” and “arena scores,” effectively closing the intelligence gap between domestic Chinese models and global proprietary systems.
Is Zhipu the only publicly traded company among these three?
Yes. As of the latest Goldman Sachs report, Zhipu is the only one of the three preferred AI companies that is publicly traded in Hong Kong; DeepSeek and ByteDance remain privately held.
What is driving the demand for these Chinese AI models?
Demand is primarily driven by the growth of Agentic AI, which requires high-performance, cost-effective models. Analysts note that these companies are successfully capturing the “lower-end” market through superior value-for-money offerings.
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