Z.ai, formerly Zhipu, has launched its new GLM-4.5 large language model, aiming to challenge DeepSeek and other rivals with a more cost-efficient and compact design. The startup claims the model is not only cheaper to operate but also smarter, thanks to its “agentic” AI architecture — a system that breaks down tasks into smaller components for greater accuracy.
A Leaner, Cheaper AI Model
The GLM-4.5 model is approximately half the size of DeepSeek’s flagship model, requiring just eight Nvidia H20 chips to run — a notable feat given U.S. export restrictions on advanced semiconductors. These H20 chips, specifically tailored by Nvidia for the Chinese market, are critical resources in the global AI race. Z.ai CEO Zhang Peng told CNBC the company has enough chips in stock and doesn’t anticipate needing more in the near term.
In terms of pricing, GLM-4.5 is designed to be more accessible. It charges $0.11 per million input tokens and $0.28 per million output tokens — significantly undercutting DeepSeek R1’s $0.14 and $2.19, respectively. This aggressive pricing strategy puts pressure on other Chinese players like Alibaba-backed Moonshot, whose new Kimi K2 model charges $0.15 and $2.50 for the same input and output token units.
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Open-Source Momentum in China’s AI Race
GLM-4.5 is fully open source, available for free download by developers — mirroring DeepSeek’s strategy and reinforcing a growing trend among Chinese AI firms. These companies are rapidly rolling out open models to cultivate local ecosystems and reduce reliance on U.S. tech.
The recent surge in open-source releases includes Tencent’s HunyuanWorld-1.0, focused on 3D scene generation, and Alibaba’s Qwen3-Coder, tailored for software development. The competition is intensifying not just on performance, but on pricing and availability, with Chinese firms aggressively pushing for market leadership in generative AI.
Backed by Heavyweights, Facing Global Scrutiny
Founded in 2019, Z.ai is backed by major investors including Alibaba, Tencent, Qiming, and even Aramco-linked Prosperity7 Ventures. The company has raised over $1.5 billion and is reportedly planning an IPO in Greater China. Despite its momentum, Z.ai faces regulatory roadblocks — it was recently added to the U.S. entity list, limiting its access to American tech and partnerships.
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